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Does the CFO matter in family firms? Evidence from Italy


  • Stefano Caselli
  • Alberta Di Giuli


Using data from 708 small and medium Italian firms during the period of 2002-2004, we find that in family firms (FFs) a nonfamily Chief Financial Officer (CFO) drives firm performance in a positive direction. FFs with a nonfamily CFO perform better than both FFs with a family CFO and nonfamily firms. The best performance is achieved when the Chief Executive Officer (CEO) is a family member and the CFO is an outsider (nonfamily). An examination of FFs across generations shows that a nonfamily CFO has always a positive effect on firm performance. Our study contributes to the literature on FFs by determining how the presence of a nonfamily CFO has an impact on firm performance. We also contribute to the literature on agency theory by showing that in small FFs: (a) having a family as majority shareholder is not detrimental to firm performance and (b) a nonfamily CFO might serve to mitigate any ineptness of descendant CEOs while retaining ownership and management in the hands of family heirs, thus avoiding the conflict of interest between family ownership and management.

Suggested Citation

  • Stefano Caselli & Alberta Di Giuli, 2010. "Does the CFO matter in family firms? Evidence from Italy," The European Journal of Finance, Taylor & Francis Journals, vol. 16(5), pages 381-411.
  • Handle: RePEc:taf:eurjfi:v:16:y:2010:i:5:p:381-411
    DOI: 10.1080/13518470903211657

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    References listed on IDEAS

    1. Di Giuli, Alberta & Caselli, Stefano & Gatti, Stefano, 2011. "Are small family firms financially sophisticated?," Journal of Banking & Finance, Elsevier, vol. 35(11), pages 2931-2944, November.
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    Cited by:

    1. Marco Cucculelli & Lidia Mannarino & Valeria Pupo & Fernanda Ricotta, 2014. "Owner-management, firm age and productivity in Italian family firms," Mo.Fi.R. Working Papers 99, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    2. De Massis, Alfredo & Kotlar, Josip & Campopiano, Giovanna & Cassia, Lucio, 2013. "Dispersion of family ownership and the performance of small-to-medium size private family firms," Journal of Family Business Strategy, Elsevier, vol. 4(3), pages 166-175.
    3. Andreas Venus & Andreas Engelen, 2012. "A Strategy Perspective on the Performance Relevance of the CFO," SFB 649 Discussion Papers SFB649DP2012-021, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    4. Alfredo De Massis & Josip Kotlar & Pietro Mazzola & Tommaso Minola & Salvatore Sciascia, 2018. "Conflicting Selves: Family Owners' Multiple Goals and Self-Control Agency Problems in Private Firms," Entrepreneurship Theory and Practice, , vol. 42(3), pages 362-389, May.
    5. Hiebl, Martin R.W., 2013. "Bean counter or strategist? Differences in the role of the CFO in family and non-family businesses," Journal of Family Business Strategy, Elsevier, vol. 4(2), pages 147-161.
    6. Martin R.W. Hiebl & Zhen Li, 2020. "Non-family managers in family firms: review, integrative framework and future research agenda," Review of Managerial Science, Springer, vol. 14(4), pages 763-807, August.
    7. Waldkirch, Matthias, 2020. "Non-family CEOs in family firms: Spotting gaps and challenging assumptions for a future research agenda," Journal of Family Business Strategy, Elsevier, vol. 11(1).
    8. Di Giuli, Alberta & Caselli, Stefano & Gatti, Stefano, 2011. "Are small family firms financially sophisticated?," Journal of Banking & Finance, Elsevier, vol. 35(11), pages 2931-2944, November.
    9. Evila Piva & Cristina Rossi-Lamastra & Alfredo De Massis, 2013. "Family firms and internationalization: An exploratory study on high-tech entrepreneurial ventures," Journal of International Entrepreneurship, Springer, vol. 11(2), pages 108-129, June.
    10. Xiaoxiang Zhang & Jo-Ting Wei & Hsin-Hung Wu, 2013. "Forced financial information restatements and management turnover: Market discipline and large family shareholders’ intervention in an emerging economy," Asia Pacific Journal of Management, Springer, vol. 30(4), pages 1005-1029, December.
    11. Silvia Bacci & Alessandro Cirillo & Donata Mussolino & Simone Terzani, 2018. "The influence of family ownership dispersion on debt level in privately held firms," Small Business Economics, Springer, vol. 51(3), pages 557-576, October.
    12. Lutz, Eva & Schraml, Stephanie & Achleitner, Ann-Kristin, 2010. "Loss of control vs. risk reduction: decision factors for hiring non-family CFOs in family firms," CEFS Working Paper Series 2010-04, Technische Universität München (TUM), Center for Entrepreneurial and Financial Studies (CEFS).

    More about this item


    small business; family firm; CFO; CEO; Italy;


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