Family Ownership and Control, the Presence of Other Large Shareholders, and Firm Performance: Further Evidence

Abstract

This article analyzes, using various econometric techniques, how family ownership, family control, and the presence of a second significant shareholder affect firm performance. The authors studied a panel of 118 nonfinancial Spanish companies (711 observations) from 2002 to 2008. Once endogeneity issues were considered, it was found that family ownership did not influence profitability. What seems to matter is family control. This study also reveals the importance of taking into account unobservable heterogeneity and endogeneity issues when analyzing firm performance and provides an interesting future avenue of research: the role played by other large shareholders in family firms.