Family Firms and the Enhanced Corporate Control: The Bright Side of Business Groups

Mauricio Jara-Bertin (), Félix López-Iturriaga () and Juan Pablo Torres ()
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Mauricio Jara-Bertin: Universidad de Chile
Juan Pablo Torres: Universidad de Chile
Authors registered in the RePEc Author Service: Mauricio Jara Bertin

HSE Working papers from National Research University Higher School of Economics

Abstract: We analyze the effect of the enhanced corporate control on the Chilean family firms performance by considering the impact of both ownership pyramid structures and business groups. Our results suggest that lower levels of separation between control rights and ownership rights increase the firm performance but too much separation can result in perverse incentives for family members to extract private benefits. We also find that group affiliation is positive for family controlled firms. Furthermore, family business groups alleviate the negative effect of the disproportionate control, which corroborates the bright side of internal capital markets for family firms

Keywords: Firm performance; Family corporate control; Pyramidal Structure; Business groups; Ownership structure. (search for similar items in EconPapers)
JEL-codes: G32 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2016
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Published in WP BRP Series: Management / MAN, February 2016, pages 1-37

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Persistent link: https://EconPapers.repec.org/RePEc:hig:wpaper:52man2016

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