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 31: Ownership Structure and Firm Performance: Evidence from Spanish Family Firms

Susana Menéndez-Requejo


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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