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Ownership versus Management Effects on Performance in Family and Founder Companies: A Bayesian Analysis

Author

Listed:
  • Joern, Block
  • Peter, Jaskiewicz
  • Danny, Miller

Abstract

There are ongoing debates in the literature concerning the performance of family firms: some studies find superior performance among these companies, others find negative or neutral per-formance effects. In this research we employ agency theory to argue that the effects of family ownership vs. family management will be quite different: the former is expected to contribute positively to performance, the latter is argued to erode performance. Previous studies, due to problems of omitted variables or multicollinearity have been unable to distinguish these effects. Using a Bayesian approach that avoids these problems, we find that whereas family and founder ownership are associated with superior performance, the results for family management and even founder management are far more ambiguous. Our results have implications regarding the own-ership and management of lone founder and family firms.

Suggested Citation

  • Joern, Block & Peter, Jaskiewicz & Danny, Miller, 2010. "Ownership versus Management Effects on Performance in Family and Founder Companies: A Bayesian Analysis," MPRA Paper 23526, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:23526
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    File URL: https://mpra.ub.uni-muenchen.de/23526/1/MPRA_paper_23526.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Family firms; lone founder firms; performance; Bayesian analysis; agency theory;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • G3 - Financial Economics - - Corporate Finance and Governance
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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