Discussion and conclusions
This research examined the impact of family involvement on performance measured on the basis of accounting profitability and market value. Our models based on panel data provide evidence that the performance of listed firms (measured as returns on assets) is positively related to having concentrated ownership in the founding family. These findings mirror prior evidence in the field that emphasizes the positive links between family ownership and listed firm performance (Allouche, Amann, Jaussaud, & Kurashina, 2008; Anderson & Reeb, 2003; Andres, 2008; Lee, 2006; Maury, 2006; San Martin-Reyna & Duran-Encalada, 2012; Villalonga & Amit, 2006). A rationale behind these findings is the fact that concentrated family ownership may lead to reduced agency problems (Anderson & Reeb, 2003; Dyer, 2006; Miller et al., 2007) and enhanced stewardship attitudes (Corbetta & Salvato, 2004; Miller & Le Breton-Miller, 2006; Uhlaner et al., 2007), which can, in turn, improve performance. Our study contributes to the literature on the influence of family ownership and firm performance by providing evidence that helps appreciate a non-static and non-linear understanding of this relationship. These findings are important because they help shed light onthe conflicting evidence that exists aroundthe links between family ownership and performance, which may not be necessarily purely negatively or purely positively correlated. We identify that while family ownership appears to positively influence performance,the relationshipbetweenthe two isnon-linear, anditis likely tobe reversedbeyonda specific levelof share ownership.Inlinewith AndersonandReeb(2003), our study reveals thatthe performance of listed family firms increases until family shareholding reaches onethird of the firm’s total shares, while beyond this level, the financial performance begins to decline.
