Family and non-family business behaviour in the wine sector: A comparative study

Abstract

The purpose of this study is to explore the main differences in key variables of winemaking companies in view of their consideration as a family business in Spain. Using a database of 520 wineries with the main variables used in the literature, this paper analyses the differences between being a family or a non-family winery on the performance, size and structure of debt. The companies were classified as family or non-family then a means test was performed for all key variables between both groups. This study suggests that there are significant differences between family and non-family businesses in the return on assets (ROA) and in the operating margin, which are higher in the case of companies classified as family businesses and in the relative debt and debt ratio, which are higher in companies considered to be non-family. The remaining variables are statistically equal. Better margins in family companies could be due to advantages in the prices derived from the products or brands offered or lower agency costs that may lead to an improvement in management costs, which explains such differences. In addition, the lower risk exposure that would lead family businesses to opt for less risky leverage formulas that would lead to increased long-term financing could explain why these advantages are not reflected in the return on equity (ROE).