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‘Running in the Family’ The Evolution of Ownership,Control and Performance in German Familyowned Firms, 1903-2003

Author

Listed:
  • Olaf Ehrhardt

    (University of Applied Sciences Straslund und Humboldt University Berlin)

  • Eric NOWAK

    (University of Lugano)

  • Felix-Michael WEBER

    (Elephant Equity, Munich)

Abstract

In this study we analyze the evolution of ownership, control, and performance in German founding-family-owned firms over the last century. We employ a hand-collected matched sample of German stock companies founded before World War I and still in existence in 2003. Comparing family-owned and non-family-owned firms over the 100-year time-span, we are able to analyze a variety of variables including ownership, control, industries, bank relationships and performance, as well as the impact of intergenerational control transfers. We find that families are slow to give up ownership , and control of family businesses remains strong even after several generations. Family firms seem to outperform nonfamily firms in terms of operating performance, but performance declines over the generations.

Suggested Citation

  • Olaf Ehrhardt & Eric NOWAK & Felix-Michael WEBER, 2006. "‘Running in the Family’ The Evolution of Ownership,Control and Performance in German Familyowned Firms, 1903-2003," Swiss Finance Institute Research Paper Series 06-13, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp0613
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    Citations

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    Cited by:

    1. Möbert, Jochen & Tydecks, Patrick, 2007. "Power and Ownership Structures among German Companies. A Network Analysis of Financial Linkages," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 35974, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    2. Moebert, Jochen & Tydecks, Patrick, 2007. "Power and Ownership Structures among German Companies. A Network Analysis of Financial Linkages," Darmstadt Discussion Papers in Economics 179, Darmstadt University of Technology, Department of Law and Economics.

    More about this item

    Keywords

    Family firms; performance; ownership; control; German stock markets;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-

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