Dynastic Control without Ownership: Evidence from Post‐war Japan
Posted: 23 May 2021
Date Written: January 12, 2021
Dynastic-controlled firms are led by founding family CEOs while the family owns an insignificant share of equity (defined as less than five percent). They represent 7.4% of listed firms in post-war Japan, include well-known firms such as Casio, Suzuki and Toyota, and are often grouped with widely-held firms in the literature. These firms differ in key performance measures from both traditional family firms and non-family firms, and evolve from the former as equity-financed growth dilutes the founding family’s ownership over time. In turn, the transition from dynastic control to non-family status is driven by a diminution of strategic family resources.
Keywords: Family firm, Founders, Ownership, Succession, Corporate Governance, Japan
JEL Classification: G32, L26
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