Owner Identity and Firm Performance: Evidence from European Companies

Marco Cucculelli

No 24, Mo.Fi.R. Working Papers from Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences

Abstract: Empirical evidence of the distribution of firms based on owner identity for a set of European countries reveals substantial differences. Using the sensitivity of a firm's sales to demand shocks as a measure of risk-taking behavior, the paper explores if owner identity affects the willingness of the firms to take risk in order to improve their current situation (venturing risk). Consistent with a hypothesis of risk-avoidance behavior, small- and medium-sized family-owned companies appear to under-react to changes in market demand, notably when ownership is highly concentrated and growth options are significant. However, they confirm their status of good performers when pure profitability measures are used. Conversely, industrial- and nonconcentrated family-owned firms appear more prone to deal with venturing risk, especially when the intensity of the risk is large as in the case of fast-growing companies or demand changes in nondomestic markets.

JEL-codes: G32 L25 (search for similar items in EconPapers)
Pages: 26
Date: 2009-05
New Economics Papers: this item is included in nep-cse and nep-eec
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Owner Identity and Firm Performance: Evidence from European Companies (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:anc:wmofir:24

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