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Effects of Family Ownership, Debt and Board Composition on Mexican Firms Performance

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  • Juan Manuel San Martin-Reyna

    (Family Business Research Center, Universidad de las Americas Puebla, Ex hacienda Sta. Catarina Martir, 728320, San Andrés Cholula, Puebla, Mexico)

  • Jorge A. Duran-Encalada

    (Family Business Research Center, Universidad de las Americas Puebla, Ex hacienda Sta. Catarina Martir, 728320, San Andrés Cholula, Puebla, Mexico)

Abstract

This study examines the relationship between ownership structure and performance of public firms in Mexico, considering debt and the structure of the board of directors as contextual and institutional factors. This research seeks to explain the mixed results about the relationship of ownership and performance presented by other relevant studies in family and non-family businesses, mainly in emerging countries. The results confirm the positive association between family ownership concentration and performance, calculated by Tobin’s Q, showing how the participation of inside shareholders on the board and a low debt level contribute to higher performance. However, the association of these variables with performance shows a contrasting effect in the case of family as compared to non-family businesses. The particular corporate legal context in Mexico could be highlighted as one of the main reasons for these results.

Suggested Citation

  • Juan Manuel San Martin-Reyna & Jorge A. Duran-Encalada, 2015. "Effects of Family Ownership, Debt and Board Composition on Mexican Firms Performance," IJFS, MDPI, vol. 3(1), pages 1-19, March.
    • Handle: RePEc:gam:jijfss:v:3:y:2015:i:1:p:56-74:d:47088
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    4. Ya-Fang Wang & Yen-Fang Kuo, 2020. "Exploring the Family Effect on Innovative Capacity and Earnings Management," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 13(2), pages 39-61, September.
    5. Martínez-García, Irma & Basco, Rodrigo & Gómez-Ansón, Silvia, 2021. "Dancing with giants: Contextualizing state and family ownership effects on firm performance in the Gulf Cooperation Council," Journal of Family Business Strategy, Elsevier, vol. 12(4).
    6. Edobor, Edeoba W. & Wiatt, Renee D. & Marshall, Maria I., 2021. "Keeping the farm business in the family: the case of farm and non-farm family businesses in the midwestern United States," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 24(6), February.
    7. Wang, Kun Tracy & Shailer, Greg, 2017. "Family ownership and financial performance relations in emerging markets," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 82-98.

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