The effect on the performance of listed family and non-family firms

The purpose of this paper is to examine whether the ownership of public firms is related to accounting and market performance, comparing family and non-family listed firms.

The paper uses regression analysis, considering a sample of Portuguese family and non-family firms (NFF) for the period between 1999 and 2010.

Overall, the results show that family firms (FF) are older, are more indebted and have higher debt costs than NFF. However, they present lower levels of risk. The evidence suggests that FF outperform NFF when the author considers a market performance measure. The market performance of family-controlled firms is more sensitive to the crisis periods and age, compared to their counterparts. The empirical findings suggest that under economic adversity, the performance is especially compromised by the firms' age.

A limitation of this study is the small size of the sample, which derives from the small size of the Portuguese stock market, the Euronext Lisbon.

This paper offers some insights on the ownership of public firms and firm performance by investigating a small European economy. The study also contributes to the stream of firm performance, considering new independent variables as determinants of firm performance, such as operational risk. Finally, the study examines the interaction between ownership and performance under both steady and adverse economic conditions, giving the opportunity to analyze whether firm performance differs according to market conditions.