34 Pages Posted: 21 Jul 2006
Date Written: July 2006
In this paper, we study the performance of Italian listed family firms in the period 1998-2003. We measure their performance by using both accounting and market data. We first study the relative performance of family firms compared to widely held firms. Then we investigate whether performance is affected by the type of family firm (i.e., whether the CEO is a member of the family or is an outsider). We find that the data and the methodology used to measure performance strongly affect the results. When performance is measured by accounting data (ROA), using a static model, we find evidence in favor of a superior performance of family firms. Such evidence is not confirmed by the application of the same model to market measures of performance. However, we report statistical evidence that the correct econometric specification for market data is a dynamic model. The results of estimation of the dynamic model for the market measures of performance are more consistent with those based on the static model for the accounting measures of performance.
Keywords: Family firms, corporate performance, management style
JEL Classification: G32
Suggested Citation: Suggested Citation
Panunzi, Fausto and Favero, Carlo A. and Giglio, Stefano and Honorati, Maddalena, The Performance of Italian Family Firms (July 2006). ECGI - Finance Working Paper No. 127/2006. Available at SSRN: https://ssrn.com/abstract=918181 or http://dx.doi.org/10.2139/ssrn.918181