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

Block, Jorn H.; Jaskiewicz, Peter; Miller, Danny

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

Journal of Family Business Strategy, Vol. 2, No. 4, pp. 232-245

45 Pages Posted: 10 Jun 2010 Last revised: 29 Jan 2013

See all articles by Jorn H. Block

Jorn H. Block

University of Trier - Faculty of Management; Erasmus University Rotterdam (EUR) - Institute of Management (ERIM)

Peter Jaskiewicz

University of Ottawa - Telfer School of Management

We employ agency theory to argue that the effects of family (and founder) ownership vs. 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 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 and even founder management are more ambiguous. Our study is the first to assess the distinctive performance effects of family and founder presence in both ownership and management.

Keywords: family firms, founder firms, performance, Bayesian analysis, agency theory

JEL Classification: C11, G34, M13

Suggested Citation: Suggested Citation

Block, Jorn Hendrich and Jaskiewicz, Peter and Miller, Danny, Ownership versus Management Effects on Performance in Family and Founder Companies: A Bayesian Reconciliation (June 9, 2010). Journal of Family Business Strategy, Vol. 2, No. 4, pp. 232-245 , Available at SSRN: https://ssrn.com/abstract=1622610