When More Is Better: Multifamily Firms and Firm Performance

Patricio Duran and Marcelo Ortiz

Entrepreneurship Theory and Practice, 2020, vol. 44, issue 4, 761-783

Abstract: Does the presence of multiple and unrelated family controllers improve firm performance? Drawing on both agency and behavioral agency theories, we argue that multifamily firms outperform single-family firms since families in multifamily firms actively monitor owners’ socioemotional goals. Additionally, we suggest that a balanced distribution of control among the owning families facilitates the monitoring process. Finally, we argue that the focal relationship follows an inverted U-shaped pattern depending on the number of families controlling the firm. We test our hypotheses using a sample of Chilean publicly listed family firms. Our study extends current knowledge of the uniqueness of multifamily firms.

Keywords: multifamily firms; socioemotional wealth; agency theory; firm performance (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:44:y:2020:i:4:p:761-783

DOI: 10.1177/1042258719851206

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