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Owner Identity and Firm Performance: Evidence from European Companies

  • Marco Cucculelli

    ()

    (Università Politecnica delle Marche, Ancona)

Empirical evidence of the distribution of firms by owner identity for a set of European countries reveals substantial differences. Using the sensitivity of a firm’s sales to demand shocks as a measure of risk-taking behavior, the paper explores if owner identity affects the willingness of the firms to seize market opportunities. Consistent with a hypothesis of risk-avoidance behavior, family-owned companies appear to underreact to changes in market demand. Conversely, industrial and nonconcentrated family-owned firms appear more prone to deal with venturing risk, especially in the case of fast-growing companies or demand changes in nondomestic markets.

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File URL: http://www.rivistapoliticaeconomica.it/2008/mar-apr/Cucculelli.pdf
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Article provided by SIPI Spa in its journal Rivista di Politica Economica.

Volume (Year): 98 (2008)
Issue (Month): 2 (March-April)
Pages: 149-178

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Handle: RePEc:rpo:ripoec:v:98:y:2008:i:2:p:149-178
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  1. Giorgio Barba Navaretti & Riccardo Faini & Alessandra Tucci, 2008. "Does Family Control Affect Trade Performance? Evidence for Italian Firms," Development Working Papers 260, Centro Studi Luca d\'Agliano, University of Milano.
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  3. Nicholas Bloom & John Van Reenen, 2007. "Measuring and Explaining Management Practices Across Firms and Countries," The Quarterly Journal of Economics, MIT Press, vol. 122(4), pages 1351-1408, November.
  4. David Sraer & David Thesmar, 2007. "Performance and Behavior of Family Firms: Evidence from the French Stock Market," Journal of the European Economic Association, MIT Press, vol. 5(4), pages 709-751, 06.
  5. Kathy Fogel & Randall Morck & Bernard Yeung, 2006. "Big Business Stability and Economic Growth: Is What's Good for General Motors Good for America?," NBER Working Papers 12394, National Bureau of Economic Research, Inc.
  6. Marianne Bertrand & Paras Mehta & Sendhil Mullainathan, 2002. "Ferreting Out Tunneling: An Application To Indian Business Groups," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 121-148, February.
  7. Asli Demirgüç-Kunt & Vojislav Maksimovic, 1998. "Law, Finance, and Firm Growth," Journal of Finance, American Finance Association, vol. 53(6), pages 2107-2137, December.
  8. Philippe Aghion & Peter Howitt & David Mayer-Foulkes, 2004. "The Effect of Financial Development on Convergence: Theory and Evidence," NBER Working Papers 10358, National Bureau of Economic Research, Inc.
  9. Villalonga, Belen & Amit, Raphael, 2006. "How do family ownership, control and management affect firm value?," Journal of Financial Economics, Elsevier, vol. 80(2), pages 385-417, May.
  10. Grosfeld, I. & Roland, G., 1995. "Defensive and Strategic Restructuring in Central European Enterprises," DELTA Working Papers 95-18, DELTA (Ecole normale supérieure).
  11. Cucculelli, Marco & Micucci, Giacinto, 2008. "Family succession and firm performance: Evidence from Italian family firms," Journal of Corporate Finance, Elsevier, vol. 14(1), pages 17-31, February.
  12. Faccio, Mara & Lang, Larry H. P., 2002. "The ultimate ownership of Western European corporations," Journal of Financial Economics, Elsevier, vol. 65(3), pages 365-395, September.
  13. Marianne Bertrand & Antoinette Schoar, 2006. "The Role of Family in Family Firms," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 73-96, Spring.
  14. Miller, Danny & Le Breton-Miller, Isabelle & Lester, Richard H. & Cannella Jr., Albert A., 2007. "Are family firms really superior performers?," Journal of Corporate Finance, Elsevier, vol. 13(5), pages 829-858, December.
  15. Stijn Claessens & Konstantinos Tzioumis, 2006. "Ownership and Financing Structures of Listed and Large Non-listed Corporations," Corporate Governance: An International Review, Wiley Blackwell, vol. 14(4), pages 266-276, 07.
  16. Demsetz, Harold & Villalonga, Belen, 2001. "Ownership structure and corporate performance," Journal of Corporate Finance, Elsevier, vol. 7(3), pages 209-233, September.
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