Considering the recent financial and economic crisis as a unique exogenous shock, our study investigates the financial performance of family-controlled firms in “steady-state” conditions as opposed to situations of severe economic distress. In addition, we focus our attention within family firms, in order to tease out the leadership (family or non-family CEO) and family ownership (family ownership concentration or dispersion) conditions that allow some governance arrangements to perform better than others during an economic downturn. Examining the entire population of Italian industrial family and non-family publicly listed companies over the period 2002–2012, we observe a significantly and consistently better performance of family-controlled firms during the financial and economic crisis, a finding that proves robust to several alternative analytical specifications, as well as to different performance measures (ROA, ROE). Then, focusing on family firms only, we find that mixed configurations (family CEOs with relatively lower family ownership concentration) produce better performance in face of an external hazard.
Weathering the storm: family ownership, governance, and performance through the financial and economic crisis
MINICHILLI, ALESSANDRO;BROGI, MARINA;
2016
Abstract
Considering the recent financial and economic crisis as a unique exogenous shock, our study investigates the financial performance of family-controlled firms in “steady-state” conditions as opposed to situations of severe economic distress. In addition, we focus our attention within family firms, in order to tease out the leadership (family or non-family CEO) and family ownership (family ownership concentration or dispersion) conditions that allow some governance arrangements to perform better than others during an economic downturn. Examining the entire population of Italian industrial family and non-family publicly listed companies over the period 2002–2012, we observe a significantly and consistently better performance of family-controlled firms during the financial and economic crisis, a finding that proves robust to several alternative analytical specifications, as well as to different performance measures (ROA, ROE). Then, focusing on family firms only, we find that mixed configurations (family CEOs with relatively lower family ownership concentration) produce better performance in face of an external hazard.File | Dimensione | Formato | |
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Minichilli, Brogi, Calabro. Weathering the Storm. 2016.pdf
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