Foundation Ownership and Economic Performance1

Steen Thomsen

Corporate Governance: An International Review, 1996, vol. 4, issue 4, 212-221

Abstract: Industrial foundations are private, self‐governing institutions that own business companies. This ownership category is quite common in Northern Europe although it appears to violate the basic principles of the (Anglo‐American) neoclassical corporation: profit maximization and risk diversification. The paper examines the economic performance of foundation‐owned companies using accounting data drawn from a sample of the 300 largest Danish companies 1982‐1992. Surprisingly, it is found that foundation‐owned companies perform slightly better than companies with private (personal) or public (dispersed) ownership. Foundation‐owned companies appear to specialize in capital and research intensive activities with high profit‐sales ratios which indicates that they are competitive in activities that require continuous long run investment. A parallel paper proposes a theoretical explanation.

Date: 1996
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