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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. David Sraer & David Thesmar, 2004. "Performance and Behavior of Family Firms : Evidence from the French Stock Market," Working Papers 2004-24, Centre de Recherche en Economie et Statistique.
  2. Maury, Benjamin, 2006. "Family ownership and firm performance: Empirical evidence from Western European corporations," Journal of Corporate Finance, Elsevier, vol. 12(2), pages 321-341, January.
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  8. Nick Bloom & John Van Reenen, 2006. "Measuring and Explaining Management Practices Across Firms and Countries," NBER Working Papers 12216, National Bureau of Economic Research, Inc.
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  10. 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.
  11. Demsetz, Harold & Villalonga, Belen, 2001. "Ownership structure and corporate performance," Journal of Corporate Finance, Elsevier, vol. 7(3), pages 209-233, September.
  12. 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.
  13. Barba Navaretti, Giorgio & Faini, Riccardo & Tucci, Alessandra, 2008. "Does Family Control Affect Trade Performance? Evidence for Italian Firms," CEPR Discussion Papers 7082, C.E.P.R. Discussion Papers.
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