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Financial performance of eponymous firms in the Czech Republic

Author

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  • Ondřej Machek
  • Martin Machek
  • Michele Stasa

Abstract

Past literature suggests that firms that bear the name of the owners, also known as eponymous firms, have superior profitability. The goal of this paper is to test the differences in the financial performance indicators between eponymous and other Czech firms. In a sample of 17,833 privately held firms operating in the Czech Republic, owned by Czech individuals or families and having complete financial data for 2014-2017, we find that eponymous firms have a significantly higher return on assets. However, no difference in return on equity has been found. We also show that eponymous firms have lower asset turnover and labour productivity, use less debt financing and have greater liquidity. In this sense, their financial characteristics are close to those of family businesses. Overall, eponymous firms are younger than other firms, but there are no significant differences in the size of the firms. The results suggest that firms named after the founder are more likely to perform well.

Suggested Citation

  • Ondřej Machek & Martin Machek & Michele Stasa, 2019. "Financial performance of eponymous firms in the Czech Republic," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2019(2), pages 38-48.
    • Handle: RePEc:prg:jnlaop:v:2019:y:2019:i:2:id:620:p:38-48
    DOI: 10.18267/j.aop.620
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    References listed on IDEAS

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    1. Steven Tadelis, 1999. "What's in a Name? Reputation as a Tradeable Asset," American Economic Review, American Economic Association, vol. 89(3), pages 548-563, June.
    2. Zellweger, Thomas M. & Eddleston, Kimberly A. & Kellermanns, Franz W., 2010. "Exploring the concept of familiness: Introducing family firm identity," Journal of Family Business Strategy, Elsevier, vol. 1(1), pages 54-63, March.
    3. Thomas M. Zellweger & Robert S. Nason & Mattias Nordqvist & Candida G. Brush, 2013. "Why Do Family Firms Strive for Nonfinancial Goals? An Organizational Identity Perspective," Entrepreneurship Theory and Practice, , vol. 37(2), pages 229-248, March.
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    Cited by:

    1. Adam P. Balcerzak & Ilona Pietryka (ed.), 2021. "Contemporary Issues in Economy. Proceedings of the International Conference on Applied Economics: Entrepreneurship and Management," Books, Institute of Economic Research, edition 1, volume 11, number 27, June.

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    More about this item

    Keywords

    eponymous firms; financial performance; Czech Republic;
    All these keywords.

    JEL classification:

    • M30 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - General
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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