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Foundation Ownership and Economic Performance1

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  • Steen Thomsen

Abstract

Industrial foundations are private, self‐governing institutions that own business companies. This ownership category is quite common in Northern Europe although it appears to violate the basic principles of the (Anglo‐American) neoclassical corporation: profit maximization and risk diversification. The paper examines the economic performance of foundation‐owned companies using accounting data drawn from a sample of the 300 largest Danish companies 1982‐1992. Surprisingly, it is found that foundation‐owned companies perform slightly better than companies with private (personal) or public (dispersed) ownership. Foundation‐owned companies appear to specialize in capital and research intensive activities with high profit‐sales ratios which indicates that they are competitive in activities that require continuous long run investment. A parallel paper proposes a theoretical explanation.

Suggested Citation

  • Steen Thomsen, 1996. "Foundation Ownership and Economic Performance1," Corporate Governance: An International Review, Wiley Blackwell, vol. 4(4), pages 212-221, October.
    • Handle: RePEc:bla:corgov:v:4:y:1996:i:4:p:212-221
    DOI: 10.1111/j.1467-8683.1996.tb00150.x
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    Cited by:

    1. Steen Thomsen & Nikolaos Kavadis, 2022. "Enterprise Foundations: Law, Taxation, Governance, and Performance," Annals of Corporate Governance, now publishers, vol. 6(4), pages 227-333, March.
    2. Ann-Kristin Achleitner & Dmitry Bazhutov & André Betzer & Joern Block & Florian Hosseini, 2020. "Foundation ownership and shareholder value: an event study," Review of Managerial Science, Springer, vol. 14(3), pages 459-484, June.
    3. Franke, Günter & Draheim, Matthias, 2015. "Foundation Owned Firms in Germany - a Field Experiment for Agency Theory," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113217, Verein für Socialpolitik / German Economic Association.
    4. Mühlbauer, Stefan, 2016. "Foundation owned firms - a delegation approach," VfS Annual Conference 2016 (Augsburg): Demographic Change 145719, Verein für Socialpolitik / German Economic Association.
    5. Block, Jörn & Jarchow, Svenja & Kammerlander, Nadine & Hosseini, Florian & Achleitner, Ann-Kristin, 2020. "Performance of foundation-owned firms in Germany: The role of foundation purpose, stock market listing, and family involvement," Journal of Family Business Strategy, Elsevier, vol. 11(4).
    6. Buchanan, Bonnie & Kaya, Caglar, 2024. "Foundation ownership and creditor governance: Evidence from publicly listed companies," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 93(C).
    7. Steen Thomsen & Caspar Rose, 2004. "Foundation Ownership and Financial Performance: Do Companies Need Owners?," European Journal of Law and Economics, Springer, vol. 18(3), pages 343-364, December.
    8. Eulerich, Marc & Welge, Martin K., 2011. "Die Einflussnahme von Stiftungen auf die unternehmerische Tätigkeit deutscher Großunternehmen," Arbeitspapiere 198, Hans-Böckler-Stiftung, Düsseldorf.
    9. Joern Block & Reza Fathollahi, 2023. "Foundation ownership and firm growth," Review of Managerial Science, Springer, vol. 17(8), pages 2633-2654, November.
    10. Steen Thomsen, 1999. "Corporate Ownership by Industrial Foundations," European Journal of Law and Economics, Springer, vol. 7(2), pages 117-137, March.

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