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

Danny Miller

HEC Montreal

Date Written: June 9, 2010

Abstract

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

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

Jorn Hendrich Block (Contact Author)

University of Trier - Faculty of Management ( email )

D-54296
Germany

Erasmus University Rotterdam (EUR) - Institute of Management (ERIM) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Peter Jaskiewicz

University of Ottawa - Telfer School of Management ( email )

136 Jean-Jacques Lussier Street
Ottawa, Ontario K1N 6N5
Canada

Danny Miller

HEC Montreal ( email )

3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H2X 2L3 H3T 2A7
Canada

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