Open AccessTHE ROLE OF FAMILY GOVERNANCE BEYOND FINANCIAL RATIOS: AN INTEGRATED PERSPECTIVE ON FAMILY FIRMS’ SURVIVAL
Author(s) -
Carmen Gallucci,
Rosalia Santulli,
Michele Modina,
Michela De Rosa
Publication year - 2020
Publication title -
journal of financial management markets and institutions
Language(s) - English
Resource type - Journals
ISSN - 2282-717X
DOI - 10.1142/s2282717x20500061
Subject(s) - corporate governance , demise , perspective (graphical) , sample (material) , business , financial crisis , empirical evidence , finance , family business , accounting , financial system , economics , political science , marketing , philosophy , chemistry , chromatography , epistemology , artificial intelligence , computer science , law , macroeconomics
In the years following the economic and financial crisis, Italy, where most firms are family-owned, has seen the demise of more companies than any other country. To avoid a similar disaster in the future, it is important to understand which determinants influence firms’ survival. Stemming from financial and family business literature, this paper investigates the role of financial ratios and family corporate governance in predicting family firms’ survival probability. To obtain empirical evidence, it performs a mediating regression analysis using a sample of 273 Italian family firms. The main findings show that family ownership concentration and the presence of a family CEO increase firms’ survival probability, while a high number of family members involved in the firm and the co-presence of more generations hinder it.