Ownership and performance in the Italian stock exchange: the puzzle of family firms

Laura Abrardi () and Laura Rondi
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Laura Abrardi: Politecnico di Torino, DIGEP

Economia e Politica Industriale: Journal of Industrial and Business Economics, 2020, vol. 47, issue 4, No 4, 613-643

Abstract: Abstract We present new evidence on the relationship between ownership, control and performance in family firms, by using a sample of Italian publicly listed companies from 2000 to 2017. We account for the potential self-selection bias of family firms with an endogenous treatment selection model. We do not find consistent evidence of a performance premium of Italian family firms or family CEOs as family firms achieve superior profitability, but lower market to book ratios. Interestingly, however, firm value is negatively impacted when the high controlling shares are disjointed from family ownership and when the family CEO is also Chair of the board. We also find that the equity stake is significantly lower when the CEO is a member of the controlling family, suggesting a trade-off between ownership and control within family firms.

Keywords: Family firms; Corporate governance and control; Firm ownership (search for similar items in EconPapers)
JEL-codes: G32 L20 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s40812-020-00160-z

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