Performance of family firms

Abstract

This chapter analyzes the performance of family firms, with a focus on return on assets (ROA) and market-to-book value (MTB). After a literature review (Section 5.1), I compare the performance of family and non-family firms using univariate and multivariate analysis (Section 5.2). After that, I estimate a multivariate model that determines the effect of the degree of family ownership and family management, two family firm characteristics, on firm performance (Section 5.3). Another model is estimated using the family firm definitions determined in Chapter 2. The multivariate models are estimated both with classical and Bayesian methods. Finally, Section 5.4 provides a summary of the main empirical results and discusses the contribution to the literature.