Edited by Panikklos Zata Poutziouris, Kosmas X. Smyrnios and Sabine B. Klein
Chapter 31: Ownership Structure and Firm Performance: Evidence from Spanish Family Firms
32 Family ownership, corporate governance and ﬁrm value: evidence from the Spanish market María Sacristán Navarro and Silvia Gómez Ansón Introduction This chapter analyses how ultimate family ownership, pyramids, and corporate governance aﬀect a company’s value. We measure how the presence of families within company management structures, that is, a family’s participation in company management and control, inﬂuence company value and how the management and control by founders aﬀects company performance. Using a sample of 86 Spanish non-ﬁnancial companies, our results show that family ownership does not aﬀect company value per se, whereas a company’s corporate management structure does inﬂuence company value. When the managers or the chairpersons of the board belong to a family, the ﬁrms’ performance appears to be aﬀected. The presence of descendants in the ﬁrm’s management and/or in the ﬁrm’s control seems to aﬀect negatively ﬁrm value. Family-run businesses are a very common ownership structure in continental markets (Faccio and Lang, 2002; La Porta et al., 1999). In this respect, Spain is no exception. Family-run businesses represent 86 per cent of the business panorama in Spain and feature serious management problems. Only 5 per cent of Spanish family companies use family boards (Gaceta de los Negocios, 29 April 2005) and only some have eﬀective boards of directors (Gallo, 1998). Recent studies (IEF, 2005) highlight the importance of the professionalization of decision-making mechanisms within family companies (with the creation of family boards and board...
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