Revisiting Family Firms

Gianpaolo Parise

No 17822, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: I propose a novel measure to identify family firms based on the number of family links between high-ranking co-workers. Leveraging this measure, I reexamine previous findings in the literature and derive five novel facts: (1) Measures of stock ownership misclassify firms with a large family presence. (2) Family-run firms outperform non-family firms. (3) Differences in valuations between family-run and non-family-run firms are amplified by selection. (4) Family-run firms are more cost-effective. (5) Family managers behave myopically. I conclude that failing to consider family links can lead to highly misleading results in the study of family firms.

Keywords: Family firms; Firm performance; Stock ownership (search for similar items in EconPapers)
JEL-codes: G32 J24 (search for similar items in EconPapers)
Date: 2023-01
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