Open AccessFamily ties, do they matter? Family ownership and firm performance in Peru
Author(s) -
Julián Benavides Franco,
Samuel Mongrut,
Mónica González-Velasco
Publication year - 2012
Publication title -
corporate ownership and control
Language(s) - English
Resource type - Journals
eISSN - 1810-0368
pISSN - 1727-9232
DOI - 10.22495/cocv9i4art7
Subject(s) - business , leverage (statistics) , stock exchange , family ties , accounting , stock market , family business , risk aversion (psychology) , monetary economics , demographic economics , finance , economics , financial economics , business administration , paleontology , horse , machine learning , biology , computer science , genealogy , history , expected utility hypothesis
This paper studies the relationship between ownership concentration, family ownership, management, and market and accounting performance for 59 industrial firms listed in the Lima Stock Exchange during the period of 1999 to 2005. An inverted U-shaped relationship was found between ownership concentration and market performance in both family and non-family firms, pointing out an entrenchment effect or excessive risk aversion of the controlling group. This effect is worsened for family firms. The presence of family members as CEOs, Chairmen and Board Members is also negative for a firm’s performance and family ownership was found to increase the leverage of a firm.