Multi-Founding Family Firms: Effects on Firm Governance, Innovation, and Performance

So-Yeon Lim and Seung-Hwan Jeong

Entrepreneurship Theory and Practice, 2025, vol. 49, issue 2, 375-402

Abstract: Traditionally, family firm studies have assumed there is a single family behind the firm. We challenge this assumption and argue that the distinction between multi-founding family firms and single-founding family firms matters. We theorize that multi-founding family firms, based on mutual monitoring among families, have corporate governance advantages (less principal–agent and principal–principal problems) in terms of reduced founder CEO entrenchment and a lower probability of descendent leadership. Furthermore, we argue that multi-founding family firms exhibit higher levels of innovation and performance. Based on U.S. firms during 2001 to 2010, we find robust support for our arguments.

Keywords: family business; agency theory; founding families; multifamily firms (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:49:y:2025:i:2:p:375-402

DOI: 10.1177/10422587241279945

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