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The Effect of Family Control on Firm Value and Performance: Evidence from Continental Europe

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  • Roberto Barontini
  • Lorenzo Caprio

Abstract

"We investigate the relation between ownership structure and firm performance in Continental Europe, using data from 675 publicly traded corporations in 11 countries. Although family-controlled corporations exhibit larger separation between control and cash-flow rights, our results do not support the hypothesis that family control hampers firm performance. Valuation and operating performance are significantly higher in founder-controlled corporations and in corporations controlled by descendants who sit on the board as non-executive directors. When a descendant takes the position of CEO, family-controlled companies are not statistically distinguishable from non-family firms in terms of valuation and performance." Copyright 2006 The Authors Journal compilation (c) 2006 Blackwell Publishing Ltd.

Suggested Citation

  • Roberto Barontini & Lorenzo Caprio, 2006. "The Effect of Family Control on Firm Value and Performance: Evidence from Continental Europe," European Financial Management, European Financial Management Association, vol. 12(5), pages 689-723.
  • Handle: RePEc:bla:eufman:v:12:y:2006:i:5:p:689-723
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    References listed on IDEAS

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