The life cycle of family ownership: International evidence

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Franks, J. ; Mayer, C. ; Volpin, P. ; Wagner, H. F. (2012)
  • Journal: The Review of Financial Studies, volume 25, issue 6, pages 1,675-1,712
  • Related identifiers: doi: 10.1093/rfs/hhr135
    mesheuropmc: health care economics and organizations

We show that in countries with strong investor protection, developed financial markets, and active markets for corporate control, family firms evolve into widely held companies as they age. In countries with weak investor protection, less developed financial markets, and inactive markets for corporate control, family control is very persistent over time. While family control in high investor protection countries is concentrated in industries that have low investment opportunities and low merger and acquisition (M&A) activity, the same is not so in countries that have low investor protection, where the presence of family control in an industry is unrelated to investment opportunities and M&A activity. The Author 2011. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail:, Oxford University Press.
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    Table A2

    Descriptive statistics for the ALL FIRM sample of twenty-seven countries This table reports results for the ALL FIRM sample, i.e., all private and listed firms in the Amadeus database in December 2006 that meet the following requirements: firm status is active, according to the database; sales, assets, operating profit, incorporation year, and industry are reported; and net sales are at least €50 million. Firms incorporated in countries not covered by Djankov et al. (2008) are excluded. Also excluded are firms in FamaFrench forty-eight industries with less than ten firms in total. FirmAge is measured in hundreds of years. Country Austria Belgium Bulgaria Croatia Czech R. Denmark France Germany Greece Sample firms 39 1,499 14 87 311 1,127 4,801 2,189 319 Family firms 11 59 4 34 24 115 1,097 527 107 Median assets 91 60.8 74.2 84 69.1 77.6 77 105.2 97.9 Median sales 186.1 113.3 94.1 107 115.6 119.2 115.2 149.8 112.4 Median FirmAge

    (yrs.) 16 21 13 15 13 15 21 18 23 23.5 11.5

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