Family Business in Peru: Survival and Expansion under the Liberalization

Tatsuya Shimizu

No 7, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: It is argued that joint stock companies would be transformed from family firms to managerial firms with their development in size and scope. Such managerial firms would have many small shareholders; hence the ownership and management of the firm would be separated. However, in many developing countries including Peru, family businesses, in which families control both ownership and management, still play an important role in the national economy. After the liberalization of economy, which started in Peru in the 1990s, the national market has become more competitive due to the increase in participation of foreign capitals. To secure competitiveness, it is indispensable for family businesses to obtain management resources such as financial, human and technological resources from outside of the families. In order to do so without losing the control over ownership and management, Peruvian family businesses have incorporated companies with distinct characteristics to the extent that they can secure the control over ownership and management inside of their group. While keeping exclusive control of companies in traditional sectors, they actively seek alliance with other families and foreign capitals in competitive sectors. The management of companies with different degrees of control allows them to survive in today's rapidly changing business environment.

Keywords: Family business; Joint stock companies; Ownership; Management; Peru; Family concern; Industrial management; Stocks; Type of business enterprise; 経営; ペルー; 同族会社; 企業経営; 株式; 企業形態 (search for similar items in EconPapers)
JEL-codes: M19 O54 (search for similar items in EconPapers)
Date: 2004-08-01
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Citations: View citations in EconPapers (2)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 7. 2004-08-01

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