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The relative performance of family firms depending on the type of financial market

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  • Lohwasser, Todor S.

Abstract

The purpose of this multi-level meta-analytic study is to examine the impact of the financial environment on general performance differences between family firms and non-family firms. The considerable cross-country variability of meta-analyses focusing on this relationship suggests noticeable differences between firm- and country-based characteristics. We trace this variance to differences in the respective development of the financial markets and banking systems. We show that family firms outperform non-family firms in market-based economies. We further show that family firms report worse performance measures in well-developed financial markets. If, however, strong investor protection buttresses these already welldeveloped financial markets, family firms also outperform non-family firms. Our study has implications for banks, family firm owners, investors, and policy-makers.

Suggested Citation

  • Lohwasser, Todor S., 2019. "The relative performance of family firms depending on the type of financial market," Discussion Papers of the Institute for Organisational Economics 8/2019, University of Münster, Institute for Organisational Economics.
    • Handle: RePEc:zbw:umiodp:82019
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    JEL classification:

    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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