Business founders and performance of family firms: evidence from developing countries in Asia

Abstract

Purpose

The purpose of this study is to examine how business founders influence the performance of family firms in developing countries in Asia.

Design/methodology/approach

The pooled ordinary least squares regression is used on a sample of 134 public listed family firms from four developing countries in Asia during the period 2004–2014. This study also conducts sub-period analyses where the study period is divided into three sub-periods, i.e. before, during and after the global financial crisis (GFC).

Findings

This study finds that founder-led family firms outperform family firms led by nonfounders for the full study period. The results for the sub-period analyses also show that founder-led family firms outperform nonfounder-led family firms for the pre-crisis and during crisis periods. Finally, this study finds no evidence supporting the superior performance of founder-led family firms post-GFC.

Originality/value

Because family firm is one of the most fundamental forms of business organization in the world, policymakers have great concerns about how business founders influence the performance of these firms. Nonetheless, the existing research on family firms is chiefly concentrated on developed countries but there is a paucity of studies being conducted in the context of developing countries. Moreover, previous research has only considered the performance of these firms during normal or turbulent times but no prior studies have compared the firm performance during normal, turbulent and recovery periods. It is the aim of this paper to address these research gaps by using a new and more recent set of data.

Citation

Chow, Y.P. (2021), "Business founders and performance of family firms: evidence from developing countries in Asia", Journal of Asia Business Studies, Vol. 15 No. 2, pp. 217-239. https://doi.org/10.1108/JABS-03-2019-0095