Family Ownership and Antitrust Violations

57 Pages Posted: 7 Oct 2019

See all articles by Mario Daniele Amore

Mario Daniele Amore

Bocconi University - Department of Management and Technology

Riccardo Marzano

Politecnico di Milano

Date Written: September 2019

Abstract

We study how family ownership shapes the firms' likelihood of being involved in antitrust indictments. Using data from Italy, we show that family firms are significantly less likely than other firms to commit antitrust violations. To achieve identification, we exploit a law change that made it easier to transfer family control. Studying the mechanisms at play, we find that family firms are especially less likely to commit antitrust violations when they feature a more prominent size relative to the city where they are located, which magnifies reputational concerns. Next, we show that family firms involved in antitrust violations appoint more family members in top executive positions in the aftermath of the indictment. Moreover, these firms invest less and curb equity financing as compared to nonfamily firms. Collectively, our findings suggest that family control wards off reputational damages but, at the same time, it weakens the ability to expand in order to keep up with fiercer competition following the dismantlement of the anticompetitive practice.

Keywords: Antitrust violation, Financing, investment, ownership

JEL Classification: D22, G34, G38, K21

Suggested Citation

Amore, Mario Daniele and Marzano, Riccardo, Family Ownership and Antitrust Violations (September 2019). CEPR Discussion Paper No. DP14018. Available at SSRN: https://ssrn.com/abstract=3464547

Mario Daniele Amore (Contact Author)

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Riccardo Marzano

Politecnico di Milano ( email )

Via Lambruschini 4/b
MIlano, MI 20156
Italy

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