Corporate Governance Characteristics and Company Performance of Family Owned and Non-Family Owned Businessess in India

Abstract

This paper studies the impact of promoters' family control and corporate governance on firm value. Purposive sampling method was adopted to choose sample firms from those listed in the Bombay Stock Exchange (BSE). Of the 4573 firms listed in BSE, banking, insurance and financial firms were excluded as they are governed by different bodies. Foreign firms and companies acquired during the period of investigation were also excluded. So a sample of 771 firms during the period 2001 to 2005 was studied. The data were analyzed using 't' test to find the difference in the firm value between promoter family controlled and non- promoter family controlled firms. Multiple regression analysis was conducted to identify the factors that affect firm value. This study found that the firm value is not significantly affected by the ownership type of the firm.