Handbook of Research on Family Business
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Handbook of Research on Family Business

Edited by Panikklos Zata Poutziouris, Kosmas X. Smyrnios and Sabine B. Klein

The Handbook of Research on Family Business provides a comprehensive first port of call for those wishing to survey progress in the theory and practice of family business research. In response to the extensive growth of family business as a topic of academic inquiry, the principal objective of the Handbook is to provide an authoritative and scholarly overview of current thinking in this multidisciplinary field.
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Chapter 30: The Structure and Performance of the UK Family Business PLC Economy

Panikkos Zata Poutziouris


31 Ownership structure and firm performance: evidence from Spanish family firms* Susana Menéndez-Requejo This chapter explores the relationship between founding-family ownership and firm performance. Starting from the agency theory approach, the potential benefits and costs of family ownership, and their influence on firm performance, are considered. The database under investigation constitutes a 8000 large and medium size Spanish firms. Several univariate analyses are conducted, as well as a cross-sectional analysis and a data envelopment analysis (DEA) in order to compare family and non-family firms performance. The empirical analysis shows that Spanish family firms perform better, in terms of return on equity, than non-family firms of the same size and in the same industry. Family involvement in management of the firm does not prove to have a positive impact on firm performance. Introduction Founding-families are a special class of shareholder, because often they hold poorly diversified portfolios but, at the same time, they are long-term investors, as their aim is to bequeath the firm to the next generations (Anderson and Reeb, 2003). In this context, the aim of this chapter is to evaluate the effects of family governance and ownership on firm performance, starting from the agency theory approach: 1. On the one hand, having large shareholders such as founding families, could negatively influence firm performance. Founding families have concerns and interests of their own, such as stability and capital preservation, compensation, related-party transactions, nepotism in manager selection or special dividends, that may not align...

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