bs_bs_banner

International Journal of Management Reviews, Vol. *, *–* (2014)

DOI: 10.1111/ijmr.12040

Family Business Performance from

a Governance Perspective: A Review
of Empirical Research
Julio Pindado1,2,3 and Ignacio Requejo1,2
1
Department of Business Administration, Universidad de Salamanca, Salamanca E37007, Spain, 2Family Business
Centre, Universidad de Salamanca, Salamanca E37007, Spain, and 3Leeds University Business School, University
of Leeds, Leeds LS2 9JT, UK
Corresponding author email: pindado@usal.es

Given the complexity of the family business phenomenon, empirical research has still
reached no consensus on whether family control is beneficial or detrimental to firm
performance. To shed new light on this issue, this paper covers more than 350 articles
published in 37 top finance and management journals. More specifically, it provides
an in-depth analysis of the family business governance system in three steps.
First, after examining the various family business definitions and measures of per-
formance used in empirical research, the authors discuss the findings on the direct
effect of family control on performance in different geographical regions. Second,
the authors pay special attention to the choice of ownership structures by business
families and analyse how family owners influence strategic decisions faced by their
corporations, including the succession process. Finally, the authors explore the inter-
action of family control with other governance devices to gain a better understanding
of family firms’ corporate decision-making and performance. The holistic approach
highlights the need to contemplate the multiple relations that exist among the various
governance dimensions of family firms to explain their unique performance. In addi-
tion to enhancing understanding of family business conduct, the authors emphasize
the need to go beyond the borders of the family firm to identify its external ante-
cedents and consequences. By integrating the finance and management perspectives
and analysing the theoretical frameworks and methodologies used in these disci-
plines, the review highlights the need for interdisciplinary collaboration to advance
family business research and thus to consolidate it as a distinctive academic field.

The authors would like to thank Herman Aguinis, Kevin

Keasey, the editor Oswald Jones and three anonymous ref-
erees for comments and suggestions on previous versions of
this paper. The authors are also grateful to the Research
Agency of the Spanish Government, DGI (Grant ECO2010-
20741), and Regional Government of Castilla y Leon (Grant
SA382A11) for financial support. Pindado acknowledges
the financial support from the Education Ministry at the
Regional Government of Castilla y Leon (Grant GR144). All
errors are our own responsibility.
Introduction
The main goal of this paper is to provide a broad
overview of the growing body of empirical research
on family business from the point of view of corpo-
rate governance to explain the mixed empirical find-
ings on the different performance of family firms
(O’Boyle et al. 2012). To achieve this objective, we
first discuss the findings on how family control

© 2014 British Academy of Management and John Wiley & Sons Ltd. Published by John Wiley & Sons Ltd, 9600 Garsington
Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA
2 J. Pindado and I. Requejo
affects firm performance, and consider the contro-
versy that characterizes the family business litera-
ture, which finds both positive and negative aspects
of family ownership. Then, to explain the conflicting
evidence on the performance difference of family
firms, we discuss the mediating and moderating role
that decision-making and governance mechanisms
can play in the relation between family control and
performance.
Given that the family business comprises a
complex web of relations, we adopt the broad defi-
nition of governance proposed by Daily et al. (2003).
According to these authors, governance refers to the
allocation of resources within the company and to the
resolution of conflicts among the various stakehold-
ers in organizations. More specifically, corporate
governance consists of a set of mechanisms that can
be classified into two broad categories, depending on
whether they are internal or external to the company
(Denis and McConnell 2003). A firm’s ownership
structure is among the internal mechanisms that have
received more attention in the literature (Connelly
et al. 2010). In this scenario, our starting point is to
examine how family control, which is a type of own-
ership structure, affects a firm’s performance and
decision-making processes. In addition, we explore
whether the influence of family control on business
conduct depends on how it is combined with other
governance devices.
Because family firm research has already reached
a status of adolescence (Gedajlovic et al. 2012), the
time is right to pause and recap what has been
achieved to date in the field. For the family business
discipline to move forward, future work must build
on the foundation of past research (Dyer and Sánchez
1998). In the early years, family business literature
focused less on empirical research (Bird et al. 2002;
Sharma et al. 1997), and coverage of governance
issues was limited (Dyer and Sánchez 1998).
However, the current trend has been toward increased
empirical research, and since the beginning of the
21st century, corporate governance has become one
of the most common themes in the family business
domain (Debicki et al. 2009). Yet, despite these
recent developments, the importance and depth of
this field of study warrant a more nuanced view of
governance topics and more work on the determi-
nants of family firm performance (Sharma et al.
2012).
Among the numerous reasons justifying an
in-depth analysis of the family business model and
its implications for corporate governance, we high-
© 2014 British Academy of Management and John Wiley & Sons Ltd.
light two. First, family firms constitute the most
popular type of ownership structure in most econo-
mies around the world (La Porta et al. 1999; Morck
et al. 2005). In fact, family control accounts for a
large proportion of the corporate sector in regions
with different institutional characteristics and regu-
latory frameworks. Claessens et al. (2000) and
Faccio and Lang (2002) report that family firms are
ubiquitous in East Asia and Western Europe, respec-
tively. In addition, this type of corporation also plays
an important role in the US economy (Gadhoum
et al. 2005; Holderness 2009). Second, contrary to
popular belief, family control is not restricted to
small and medium-sized enterprises (SMEs). Indeed,
to become a distinctive field, family business
research must differentiate itself from the entrepre-
neurship and small-business management categories
(Bird et al. 2002). A great proportion of SMEs are in
the hands of their founders and founders’ families,
but owner families control corporations of all sizes,
including large corporations. Furthermore, to date,
large public family firms have been the subject of
most academic research, as the literature recognizes
(Bammens et al. 2011).
We advance previous surveys of the family busi-
ness literature whose objective is to analyse the
establishment and evolution of the family business
discipline as a unique field of study (Casillas and
Acedo 2007; Heck et al. 2008; Litz et al. 2012;
Moores 2009; Zahra and Sharma 2004). Specifically,
we make several contributions to the family business
field by examining previous empirical evidence in
search of promising avenues of research.
First, we pay special attention to how the choice of
internal governance mechanisms by controlling
families affects family business performance. In par-
ticular, the review analyses the complex web of rela-
tions that exist among different corporate dimensions
of family firms and emphasizes the need to contem-
plate numerous mediating and moderating effects
(Sirmon et al. 2008) to disentangle whether the
family business model is a superior organizational
form. We go beyond the analysis of traditional gov-
ernance mechanisms such as the board of directors
(Bammens et al. 2011) to consider other governance
tools that are at family owners’ disposal to mitigate
agency problems. This discussion benefits family
firms by enabling them to identify how the adoption
of certain governance structures can influence their
overall performance.
Second, we focus primarily on empirical research.
In contrast, previous works have emphasized the
Family Business and Corporate Governance
theoretical side of the family business domain
(Sharma 2004) and reviewed the various theories that
have been applied to the study of family firms
(Chrisman et al. 2005; Siebels and zu Knyphausen-
Aufseß 2012). Our effort to reconcile the mixed
results on how family control affects firm perfor-
mance improves our understanding of the family
business phenomenon. Sharma (2004) concludes
that, in addition to developing more sophisticated
theory-based conceptualizations, it is equally impor-
tant to subject these theoretical models to rigorous
empirical research to create usable knowledge.
Therefore, in addition to discussing previous empiri-
cal evidence on the family business governance
system, we analyse the methodologies and the type
of data used in the family business literature to
provide new guidelines on how family business
research can move forward.
Third, the adoption of a holistic approach allows
us to identify gaps in the empirical family business
literature that suggest promising avenues for future
research. We highlight the need to investigate the
external antecedents and consequences of family
control. Specifically, we propose the need to go
beyond the borders of the family business govern-
ance system to examine how formal and informal
institutions at a country level affect family firms
and are shaped by this type of company. We still
need to gain additional insights into the reasons for
the predominance of family firms all over the
world. Clarification of the impact that family
control has on economic growth and financial
markets’ development is of paramount importance.
Our proposed topics highlight the need for a better
understanding of the role of informal institutions,
such as cultural norms and values that characterize
a country’s society, in determining family business
behaviour.
Finally, to the best of our knowledge, we are the
first to review the literature on family firms by cov-
ering a wide range of top journals from two different
but complementary business disciplines: finance and
management. As breakthroughs often occur as a
result of interdisciplinary collaboration (Dyer and
Sánchez 1998) and given that interdisciplinary
research is particularly well suited to explain
complex societal phenomena (Siedlok and Hibbert
2013), we suggest establishing a dialogue among
family business scholars with different backgrounds.
As pointed out in the context of other management
topics (Miller 2011), enhancing cross-fertilization
among disciplines can enable family firm researchers
© 2014 British Academy of Management and John Wiley & Sons Ltd.
3
to develop further the family business domain. Given
that family business is positioned on the boundaries
of different fields (Craig and Salvato 2012), we con-
tribute to the literature by covering research carried
out by finance and management scholars, whose
assessments of the family firm are likely to differ
(Schulze and Gedajlovic 2010).
The remainder of the paper is structured as
follows. Next, we explain the methodology used to
select the works included in the review and comment
on the main theoretical frameworks used in empirical
family business studies. Figure 1 illustrates the
overall structure of the literature review. We first
discuss the empirical investigations on the direct
effect of family control on firm performance. We
then propose some likely explanations for the perfor-
mance differences of family firms. Specifically, we
expect that the adoption of control structures, corpo-
rate decision-making, and the succession process in
family firms mediate the relation between family
control and the performance of the company. Finally,
we examine the use of corporate governance mecha-
nisms by family firms that are likely to moderate the
relation between family control and performance. To
conclude, we identify promising avenues for future
research, based on topics covered thus far in the
literature and on our analysis of the differences that
exist between finance and management studies on
family firms.
Methodology and theoretical
framework
Identification of studies and selection process
We take five steps to identify and select the articles
covered in this review. The selection process has
been carefully designed to assure that we cover the
mainstream family business literature and that we
include in the survey all finance and management
publications that are relevant to understanding the
family business governance system.
1. As a starting point, we search for articles whose
title, abstract, or list of keywords includes any of
the four words governance, review, survey or
overview along with either the terms family busi-
ness or family firm. In this stage, we focus on the
journals regarded by family business experts as
the most appropriate to publish family business
research (Chrisman et al. 2008, 2010; Siebels and
zu Knyphausen-Aufseß 2012).
4 J. Pindado and I. Requejo

Ownership
structure

Moderating role of
corporate governance
mechanisms
Ownership Ownership
structures in Corporate structures in
family firms governance family firms
mechanisms

Effect of family Effect of family

control on firm control on firm
Family performance performance Firm
control performance

Corporate Corporate
decision making Corporate decision making
and succession in governance and succession in
family firms mechanisms family firms

Moderating role of
corporate governance
mechanisms

Strategic
decisions

Succession
process

Direct effect
Mediating effect
Moderating effect

Figure 1. Family business performance from a corporate governance perspective

2. We cover works from various disciplines espe-
cially concerned with the performance of the
business and in which the unit of analysis is the
company. Therefore, we consider four subject cat-
egories of the Social Science Edition of the
Journal Citation Reports (JCR). The four catego-
ries included are Business, Business Finance,
Economics and Management. For the sake of
brevity, throughout the review we refer to the
finance and management disciplines. The former
discipline includes the Business Finance and Eco-
nomics categories, and the latter covers the Busi-
ness and Management categories. We use the
2010 edition of the JCR because it was the latest
edition at the start of the study.
3. Each of the four categories selected in the previ-
ous step contains a large variety of journals. In
line with the strategy proposed in prior research
(Debicki et al. 2009), we use the JCR’s Five-Year
Impact Factor to rank the journals by scientific
quality and reputation in the corresponding fields.
4. We then determine the number of journals neces-
sary to obtain a broad spectrum of articles bal-
anced across the finance and management fields.
Specifically, we consider the top 30 journals by
Five-Year Impact Factor in each of the four JCR
categories.
5. In the final step, we define the search terms. In
each journal, we search for articles that include
the word ‘governance’ in any part of the text in
addition to any one of the following five terms:
‘family business’, ‘family firm’, ‘family control’,
‘family ownership’ or ‘founding family’.
We focus on works published in academic journals
because the establishment of a unique and distinctive
body of knowledge is achieved mainly through sys-
tematic, rigorous, peer-reviewed research (Bird et al.
2002). Unlike previous surveys of the family busi-
ness literature, we not only account for the special-
ized outlets regarded as most appropriate for family
business studies (Step 1), but we also consider a

© 2014 British Academy of Management and John Wiley & Sons Ltd.
Family Business and Corporate Governance
number of journals from a variety of other disci-
plines. Covering a wider range of journals is vital for
this review, because the publication of family busi-
ness studies in more general outlets in addition to
specialized journals increases the overall status and
legitimacy of the field (Craig and Salvato 2012). In
addition, Gedajlovic et al. (2012) suggest that con-
tributions from both family business specialists and
generalists from traditional business sciences are
needed to achieve further developments in the family
business domain.
We exclude some studies that fulfilled the selec-
tion criteria, but did not fulfil the goals of this study.
The most frequent motives for the exclusions are: (i)
the articles did not analyse any family business issue,
but some of the terms mentioned in Step 5 appeared
in the brief biographical sketch of the authors; (ii) the
studies contained some of the keywords in the list
of references, but did not investigate any family
business topic; and (iii) the studies did not have
a governance perspective. Conversely, we take into
consideration other studies that did not fulfil the
selection criteria, but are influential works that con-
tribute to our goal and are relevant to our discussion.
As a result, the review covers 354 articles, originat-
ing from 37 different journals. Table 1 shows the
distribution of articles by subject category (i.e.
finance or management) and journal.
In addition, Panel A of Appendix 1 identifies the
type of study that results from the selection process,
as previously explained. Consistent with our objec-
tive, the vast majority of the articles (79.7%) consist
of empirical research (i.e. empirical and mixed cat-
egories). However, to frame our discussion and
explain how the present study contributes to the
family business literature, we also consider a number
of reviews and strictly theoretical works. Interest-
ingly, the proportion of theoretical studies is notably
larger in management journals than in finance pub-
lications (14.2% vs. 2.5%). This finding supports the
notion that management scholars are in a good posi-
tion to lead the development of a comprehensive
theory of the family firm. Conversely, most finance
articles are empirical, which suggests complemen-
tarities between both disciplines.
Theory and definition of variables
Before discussing the empirical results that help us to
disentangle why family firms perform differently, we
need to clarify the main theoretical frameworks
adopted in empirical family business articles and
© 2014 British Academy of Management and John Wiley & Sons Ltd.
5
identify the type of firm that has been the subject of
study in family business research. Given that our
main focus is on the effect of family control on firm
performance, we also comment on the definitions of
family firm and the measures of performance used in
previous studies.
Regarding the theories used, Panel B of Appendix
1 shows that most empirical research (56.0%) is
based on agency arguments. This result is consistent
with the predominance of agency theory in corporate
governance and family firm studies (Salvato and
Moores 2010) and the frequency of this theoretical
approach among the most influential articles in
family business research (Chrisman et al. 2010).
However, Panel B shows that a variety of other theo-
ries has been considered in the family business lit-
erature, especially among recent management works
(Lim et al. 2010; Sieger et al. 2011). In particular,
the resource-based view, stewardship theory and the
cultural perspective are the most common theoretical
frameworks in management studies following
agency theory. The number of management articles
that use more than just one theory is also remarkable
compared with finance research. Therefore, we adopt
an eclectic approach in terms of the theoretical
framework, with agency theory at the roots of many
of our arguments. Such an approach, whereby the
agency model is combined and enriched with con-
cepts from other theories, enables us to consider a
more complex web of relations between family
control and other corporate dimensions.
A number of factors explain the widespread use of
agency arguments in the analysis of the family busi-
ness governance system: (i) agency theory, which
can be used in the analysis of large and small com-
panies alike (Gabrielsson 2007; Randøy and Goel
2003), not only has been extensively applied in cor-
porate governance studies (Bartholomeusz and
Tanewski 2006; Furrer et al. 2008), but is still the
dominant theoretical framework in this field (Raelin
and Bondy 2013); (ii) other theories more recently
adopted in family business research such as steward-
ship theory can be regarded as special cases of
agency theory (Chrisman et al. 2005); and (iii) an
agency theoretical approach can be combined with
concepts from other fields, and thus its flexibility
allows for application to a variety of non-traditional
settings to enhance the understanding of family firms
(Gedajlovic and Carney 2010; Wiseman et al. 2012).
In this respect, as Raelin and Bondy (2013) recently
discussed, agency theory rests on two assump-
tions: the divergent interests between managers and
6 J. Pindado and I. Requejo

Table 1. Distribution of articles by social science discipline and journal

Rank Journal No. of articles % of total % of category

Panel A: Journals included in the Business Finance and Economics Journal Citation Reports categories
1 Journal of Financial Economics 24 6.8 15.3
2 Journal of Banking and Finance 21 5.9 13.4
3 Journal of Corporate Finance 21 5.9 13.4
4 Journal of Finance 17 4.8 10.8
5 Review of Financial Studies 17 4.8 10.8
6 European Financial Management 14 4.0 8.9
7 Journal of Financial and Quantitative Analysis 11 3.1 7.0
8 Journal of Business, Finance and Accounting 8 2.3 5.1
9 Financial Management 6 1.7 3.8
10 American Economic Review 5 1.4 3.2
11 Journal of Accounting Research 3 0.8 1.9
12 Quarterly Journal of Economics 3 0.8 1.9
13 Journal of Accounting and Economics 2 0.6 1.3
14 Journal of Economic Literature 2 0.6 1.3
15 Journal of Economic Perspectives 2 0.6 1.3
16 Journal of Political Economy 1 0.3 0.6
Total category 157 44.4 100.0
Panel B: Journals included in the Business and Management Journal Citation Reports categories
1 Family Business Review 40 11.3 20.3
2 Corporate Governance: An International Review 31 8.8 15.7
3 Entrepreneurship Theory and Practice 29 8.2 14.7
4 Journal of Management Studies 16 4.5 8.1
5 Journal of Business Venturing 15 4.2 7.6
6 Journal of Small Business Management 9 2.5 4.6
7 Journal of International Business Studies 8 2.3 4.1
8 Organization Science 8 2.3 4.1
9 Strategic Management Journal 7 2.0 3.6
10 Academy of Management Journal 5 1.4 2.5
11 International Journal of Management Reviews 5 1.4 2.5
12 Journal of World Business 5 1.4 2.5
13 Strategic Entrepreneurship Journal 5 1.4 2.5
14 Administrative Science Quarterly 4 1.1 2.0
15 Academy of Management Review 2 0.6 1.0
16 Journal of Management 2 0.6 1.0
17 Leadership Quarterly 2 0.6 1.0
18 Academy of Management Annals 1 0.3 0.5
19 Journal of Organizational Behavior 1 0.3 0.5
20 Management Science 1 0.3 0.5
21 Research Policy 1 0.3 0.5
Total category 197 55.6 100.0
Total no. of articles 354 100.0

shareholders and the aligned interests between share-
holders and society. This broad definition facilitates
the extension of agency-based models to incorporate
certain dimensions that can be important in the
family business context, such as altruism (Karra
et al. 2006; Lubatkin et al. 2005). These factors help
us to understand that agency theory underlies a
potentially dominant paradigm for the study of
family firms such as the socio-emotional wealth
approach (Berrone et al. 2012; Gomez-Mejia et al.
2011).
With respect to the type of firm analysed (i.e.
private vs. public family firms), our discussion
includes studies that examine any family business
type from a governance perspective. However, Panel
C of Appendix 1, which classifies the articles accord-
ing to the type of company analysed (i.e. finance vs.
management categories), also shows that a large pro-
portion of works (65.6%) exclusively investigate
publicly listed family firms. This pattern can
be driven by the importance of public family
firms among major businesses around the world

© 2014 British Academy of Management and John Wiley & Sons Ltd.
Family Business and Corporate Governance
(Claessens and Tzioumis 2006; Franks and Mayer
2001; Le Breton-Miller and Miller 2009) along with
the easier access to data on this type of company.
Another likely explanation is that comparisons
between private family businesses and their non-
family counterparts in terms of performance can lead
to biased conclusions owing to the unique non-
economic objectives attributed to small family firms
(Chrisman et al. 2012; Schulze et al. 2001). In con-
trast, a primary concern for both public family and
non-family firms is value maximization as a result of
pressure from impatient minority shareholders (Le
Breton-Miller and Miller 2011). However, more than
one-fifth of studies (21.3%) – most of them pub-
lished in management journals – focus on private
family firms. Indeed, these companies face their own
agency conflicts (Lubatkin et al. 2005), and the
adoption of adequate governance mechanisms allows
them to limit their agency costs (Schulze et al. 2001).
For this reason, we do not restrict our analysis to one
family firm type.
To understand previous empirical evidence, it is
important to examine the family firm definitions and
measures of performance used. Although broader
and narrower definitions of family business have
been proposed, empiricists frequently adopt less
restrictive alternatives as long as the criteria enable a
clear distinction between family and non-family
firms (Klein 2000). Our analysis of the empirical
literature suggests five possible criteria to classify a
firm as family controlled. Panel A of Appendix 2
provides a summary. The diversity of definitions cor-
roborates the ongoing debate among academics on
how to define family businesses (Chrisman et al.
2003; Klein et al. 2005a; Mroczkowski and
Tanewski 2007). However, the different definitions
have their operational nature in common, which is
fundamental for empirical research. Moreover, all
definitions aim to capture two core dimensions:
family involvement in the company (Fiegener 2010;
Van den Berghe and Carchon 2003) and the family’s
ability to exert influence over decision-making pro-
cesses (Carney 2005). Panel A shows that having a
family as the largest shareholder is the most common
feature that defines family firms (57.3% of studies
use this definition). Among management studies,
involvement of several family members in the
company is the second family firm definition most
widely used (22.0%), which suggests that, compared
with finance researchers, management scholars adopt
more restrictive and nuanced criteria to define family
control. The use of this definition may be explained
© 2014 British Academy of Management and John Wiley & Sons Ltd.
7
in part by the analysis of private family businesses by
a significant proportion of management studies.
Regarding the measures of performance, Panel B
of Appendix 2 shows that market value is the most
frequent measure (44.1%), especially in finance arti-
cles, followed by profitability (25.5%). A possible
reason for this finding is that firm value, compared
with accounting measures, cannot be easily manipu-
lated (Sánchez-Ballesta and García-Meca 2007). In
addition, mainstream theories of firm strategy con-
verge on economic value creation as the dominant
goal (Chrisman et al. 2005). However, given that
market value can only be obtained for listed corpo-
rations and given that several articles included in the
review investigate private companies, some studies
employ other measures of performance. Despite the
diversity of measures, recent research recognizes that
non-economic goals and non-financial measures of
performance deserve much more attention in future
family business literature (Yu et al. 2012). Indeed,
family owners have non-economic goals that can
influence their preferences and practices (Chrisman
et al. 2012; Stockmans et al. 2010). In this respect,
several works find that retaining control of the busi-
ness is of great concern to families (Westhead and
Howorth 2006). We consider how family owners
pursue this kind of non-economic objective by cov-
ering in the review those studies that investigate the
effect of family control on decisions such as the
financing policy (Croci et al. 2011).
The effect of family control on
corporate performance
Panel A of Table 2 shows studies that disentangle
whether large family shareholders are beneficial or
detrimental to firm performance. The performance of
family and non-family firms should be different even
when both possess similar levels of resource stocks
(Chrisman et al. 2009). Given the potential benefits
and costs associated with the family business model,
it remains unclear whether family control and perfor-
mance are positively or negatively related (Miller and
Le Breton-Miller 2006).
Among the potential benefits of family control,
family owners usually focus on the long term when
making corporate decisions, and they have longer
investment horizons (Le Breton-Miller and Miller
2006; Prencipe et al. 2008, 2011). As reported in
recent research, longer decision horizons are nega-
tively associated with agency costs and positively
8 J. Pindado and I. Requejo

Table 2. Selection of studies on the family business governance system

Panel A: Effect of family control on corporate performance

Adams et al. (2005) Gedajlovic et al. (2012) Minichilli et al. (2010)
Alpay et al. (2008) Haw et al. (2010) Morck and Yeung (2004)
Anderson and Reeb (2003) Herrero (2011) Oswald et al. (2009)
Andres (2008) King and Santor (2008) Peng and Jiang (2010)
Barontini and Caprio (2006) Kowalewski et al. (2010) Perrini et al. (2008)
Barth et al. (2005) Le Breton-Miller and Miller (2011) Randøy and Goel (2003)
Bjuggren and Palmberg (2010) Lins (2003) Schulze et al. (2001)
Bozec and Laurin (2008) Lumpkin and Brigham (2011) Singal and Singal (2011)
Chiang and Lin (2007) Luo and Chung (2013) Thomsen and Pedersen (2000)
Chirico et al. (2011) Margaritis and Psillaki (2010) Villalonga and Amit (2006)
Chrisman et al. (2009) Maury (2006) Westhead and Howorth (2006)
Craig et al. (2008) Miller and Le Breton-Miller (2011) Wong et al. (2010)
Eddleston and Kellermanns (2007) Miller et al. (2007) Yu et al. (2012)
Eddleston et al. (2008) Miller et al. (2009) Zellweger et al. (2012)
Panel B: Explanations for different performance of family firms
Ownership structures in family firms
Almeida et al. (2011) Bertrand et al. (2008) Hamelin (2011)
Almeida and Wolfenzon (2006a) Bigelli and Mengoli (2011) Jog et al. (2010)
Almeida and Wolfenzon (2006b) Caprio and Croci (2008) Khanna and Palepu (2000)
Bae et al. (2002) Chang (2003) Luo and Chung (2005)
Bae et al. (2008) Claessens et al. (2000) Masulis et al. (2011)
Baek et al. (2004) Connelly et al. (2012) Morck and Yeung (2003)
Ben-Amar and André (2006) Cronqvist and Nilsson (2003) Orbay and Yurtoglu (2006)
Bennedsen and Nielsen (2010) Douma et al. (2006) Villalonga and Amit (2009)
Bertrand et al. (2002) Gompers et al. (2010) Yeh (2005)
Corporate decision-making in family firms
Achleitner et al. (2013) Croci and Del Giudice (2013) Le Breton-Miller et al. (2011)
Amoako-Adu and Smith (2001) Croci et al. (2011) Lin et al. (2011)
Anderson et al. (2003) Cronqvist and Nilsson (2005) Luo et al. (2009)
Anderson et al. (2009) Cucculelli and Marchionne (2012) Martí et al. (2013)
Anderson et al. (2012a) Di Giuli et al. (2011) McConaughy (1999)
Anderson et al. (2012b) Eberhard and Craig (2013) Miller et al. (2010)
Aslan and Kumar (2012) Eddleston et al. (2012) Miller et al. (2011)
Banalieva and Eddleston (2011) Ellul et al. (2010) Munari et al. (2010)
Basu et al. (2009) Espenlaub et al. (2012) Pindado et al. (2011)
Bauguess and Stegemoller (2008) Fernández and Nieto (2006) Romano et al. (2001)
Belenzon and Berkovitz (2010) Filatotchev et al. (2007) Sciascia et al. (2013)
Bhaumik et al. (2010) Geranio and Zanotti (2012) Shim and Okamuro (2011)
Block (2012) Giannetti and Simonov (2006) Shyu and Lee (2009)
Boubakri and Ghouma (2010) Gomez-Mejia et al. (2007) Sieger et al. (2011)
Caprio et al. (2011) Gomez-Mejia et al. (2010) Sirmon et al. (2008)
Chen and Hsu (2009) Holmen et al. (2007) Wu et al. (2007)
Chen et al. (2009) Kalcheva and Lins (2007) Xu et al. (2013)
Chen et al. (2010) Kellermanns and Eddleston (2006) Yoshikawa and Rasheed (2010)
Chua et al. (2011) Kim et al. (2008) Zahra et al. (2008)
Chung and Luo (2008a) Kuo and Hung (2012) Zhou et al. (2011)
Succession process in family firms
Amore et al. (2011) Giambatista et al. (2005) Lubatkin et al. (2005)
Bennedsen et al. (2007) Gomez-Mejia et al. (2001) Mehrotra et al. (2011)
Bocatto et al. (2010) Handler (1994) Miller et al. (2003)
Burkart et al. (2003) Hillier and McColgan (2009) Mitchell et al. (2009)
Cabrera-Suárez (2005) Howorth et al. (2004) Parrino (1997)
Chung and Luo (2008b) Klasa (2007) Perez-Gonzalez (2006)
Cucculelli and Micucci (2008) Lambrecht (2005) Smith and Amoako-Adu (1999)
Dawson (2011) Lee et al. (2003) Stewart and Hitt (2012)
De Massis et al. (2008) Lin and Hu (2007) Wennberg et al. (2011)

© 2014 British Academy of Management and John Wiley & Sons Ltd.
Family Business and Corporate Governance 9

Table 2. Continued

Panel C: Moderating role of corporate governance mechanisms

Ali et al. (2007) Choi et al. (2007) Lester and Cannella (2006)
Amoako-Adu et al. (2011) Chrisman et al. (2005) Li and Srinivasan (2011)
Anderson and Reeb (2004) Chua et al. (2009) Lin and Chuang (2011)
Arregle et al. (2007) Combs (2008) Ling and Kellermanns (2010)
Attig et al. (2008) Combs et al. (2010) Lubatkin et al. (2007)
Berrone et al. (2012) Cruz et al. (2010) Martinez (2009)
Bertrand and Schoar (2006) DeAngelo and DeAngelo (2000) Maury and Pajuste (2005)
Block (2011) Delgado-García et al. (2010) McConaughy (2000)
Bloom and Van Reenen (2007) Faccio et al. (2001) Michiels et al. (2013)
Blumentritt (2006) Faccio and Parsley (2009) Mishra (2011)
Bona-Sánchez et al. (2011) Franks and Mayer (2001) Nowland (2008)
Boubaker and Labégorre (2008) Gibson (2003) Pieper et al. (2008)
Braun and Sharma (2007) Gomez-Mejia et al. (2003) Pindado et al. (2012)
Bryan et al. (2010) Gopalan and Jayaraman (2012) Schulze et al. (2003a)
Carney (2005) Gugler (2003) Setia-Atmaja et al. (2009)
Chaney et al. (2011) He (2008) Stockmans et al. (2010)
Chen and Nowland (2010) Jara-Bertin et al. (2008) Van den Heuvel et al. (2006)
Chen et al. (2008) Jiraporn et al. (2012) Voordeckers et al. (2007)
Chen et al. (2011) Jones et al. (2008) Wang (2006)
Chiang and He (2010) Klein et al. (2005b) Yeh and Woidtke (2005)
Chizema (2010) Laeven and Levine (2008) Young et al. (2008b)

Note: This table lists a number of studies that we consider in our analyses and discussion classified in the three main areas that structure
the central part of the review: (i) works that provide some evidence on the impact of family control on firm economic outcomes (Panel
A); (ii) articles that help to explain the different performance of family firms by analysing their ownership structures, corporate decisions,
and succession processes (Panel B); and (iii) studies on the role of corporate governance mechanisms in family businesses (Panel C).

affect a firm’s market valuation (Antia et al. 2010).
Reputational concerns also characterize family busi-
nesses (Chen et al. 2010; Wang 2006), which may
promote the family-based brand identity to improve
firm competitiveness and performance (Craig et al.
2008). Another distinctive feature of family firms is
the convergence between ownership and manage-
ment, which contributes to reducing agency costs
(Ang et al. 2000). In addition, family-specific
resources such as reciprocal altruism can be a source
of competitive advantage (Eddleston et al. 2008).
However, family control also leads to potential
costs and drawbacks. Although the classic owner–
manager agency conflict (Jensen and Meckling
1976) is mitigated in family firms, family control can
create a new agency problem between large and
minority investors (Shleifer and Vishny 1997;
Thomsen et al. 2006; Yang 2010), known as the
principal–principal conflict (Young et al. 2008a).
This conflict arises because families have incentives
to expropriate minority shareholders’ wealth
(Boubakri et al. 2010) and because they are more
likely to maintain control over firms that offer rela-
tively large private benefits (Hauser and Lauterbach
2004). Family businesses also face self-control prob-
lems and the added risks of intra-family conflict
and parental altruism (Lester and Cannella 2006;
Lubatkin et al. 2005; Schulze et al. 2003a).
Given this scenario, Anderson and Reeb (2003)
investigate the relation between founding-family
ownership and corporate performance and find that,
overall, S&P 500 family firms perform better than
their non-family counterparts. However, additional
analyses reveal that the relation between founding-
family ownership and performance exhibits an
inverted U-shape. These findings corroborate the
extensively documented non-linear relation between
ownership concentration and performance
(Gedajlovic and Shapiro 1998; López-de-Foronda
et al. 2007; Miguel et al. 2004; Thomsen and
Pedersen 2000).
Subsequent research attempts to clarify whether
the different market value of family firms is attribut-
able to certain combinations of family ownership,
control and management (Villalonga and Amit
2006). Although concentrated ownership rather than
family control appears to be the main determinant of
firm performance (Singal and Singal 2011), the
overall impact of family ownership on performance
depends on how it is combined with control

© 2014 British Academy of Management and John Wiley & Sons Ltd.
10
structures and management (Braun and Sharma
2007; Perrini et al. 2008). The increase in market
valuation attributable to family ownership is in part
offset by the value discount associated with the use
of control-enhancing mechanisms (Bozec and Laurin
2008; Claessens et al. 2002). Moreover, the effect of
family management depends on who occupies the
CEO position (Morck et al. 1988).
The superior performance of US family firms has
been called into question by Oswald et al. (2009),
who find evidence of managerial entrenchment
among private and public family businesses. Other
studies point out the necessity of clearly differenti-
ating between true family firms and lone founder or
entrepreneur-controlled businesses (Lester and
Cannella 2006; Miller et al. 2007, 2011). Entrepre-
neurship is uniquely characterized, and thus the
differentiation between corporations controlled by a
family and those owned by an entrepreneur is
important (Evans and Leighton 1989). Given the
unique nature of founders’ leadership roles and
their ability to accumulate power, control by
founder CEOs (i.e. entrepreneurs) may affect cor-
porate performance in a particular way that differs
from the effect of family control (Adams et al.
2005; Fahlenbrach 2009; Gao and Jain 2011). The
different level of entrepreneurial orientation
between family firms and firms controlled by a lone
founder CEO supports the need to make a distinc-
tion between both types of companies (Miller and
Le Breton-Miller 2011).
Complementing US empirical evidence, several
studies analyse the relation between family control
and firm performance in the Western European
region (Andres 2008; Barontini and Caprio 2006;
Maury 2006). Investigating the family effect on firm
value in different contexts is necessary because
whether family control is good, bad or irrelevant
depends on legal and market institutions (Luo and
Chung 2013; Peng and Jiang 2010). The effect of
family control on performance is likely to differ
across regions owing to the varying degrees of inves-
tor protection across countries (La Porta et al. 1998),
which determine the level of capital market develop-
ment (La Porta et al. 1997) as well as several corpo-
rate dimensions (La Porta et al. 2000, 2002). In
general, family control in Western Europe leads to
higher firm profitability and market value (Barontini
and Caprio 2006; Maury 2006). However, in some
European countries (e.g. Poland) the relation
between family ownership and performance is non-
linear (Kowalewski et al. 2010).
© 2014 British Academy of Management and John Wiley & Sons Ltd.
J. Pindado and I. Requejo
US and European results are, overall, in line with
subsequent empirical evidence from other geo-
graphical regions, such as Canada (Ben-Amar and
André 2006; King and Santor 2008; Miller et al.
2008). The development of close relationships with
external stakeholders compensates for the lack of
market infrastructures and creates positive perfor-
mance effects for family businesses in emerging
markets (Miller et al. 2009). These firms also help to
sustain the local communities in which they operate
(Herrero 2011) and are more responsive to institu-
tional pressures (Berrone et al. 2010). Nevertheless,
a high level of trust within a small elite of wealthy
families and politicians may lead to higher preva-
lence of family firms, which can, in turn, retard eco-
nomic growth (Bertrand and Schoar 2006; Fogel
2006; Morck and Yeung 2004). The lower productiv-
ity of family firms (Barth et al. 2005; Chiang and Lin
2007) helps to explain the adverse consequences on a
country’s economic development when a large pro-
portion of its corporate sector is in the hands of a few
powerful families.
Overall, the empirical evidence discussed in
this section confirms that family control affects
corporate performance (see Figure 1). In addition,
the differences in performance between family
and non-family firms apply to different regions.
However, no consensus exists as to whether family
control and performance are positively or negatively
related.
Explanations for the different
performance of family firms
Given the previous discussion, we now review works
whose evidence may provide some explanations for
the performance difference between family and non-
family firms (see Panel B of Table 2). Specifically,
we suggest that family owners affect firm perfor-
mance through their influence on (i) their choice of
ownership structure, (ii) corporate strategies and (iii)
the succession process. These three business dimen-
sions are likely to mediate the relation between
family control and performance. As Figure 1 shows,
a mediating effect exists when family control indi-
rectly affects firm performance through its influence
on other business dimensions. Lins et al. (2013),
who find that the underperformance of family firms
during the 2008–2009 financial crisis is, in part,
attributable to investment cuts implemented by
family firms, test this type of effect. That is, family
Family Business and Corporate Governance
control leads to underinvestment, which, in turn,
affects corporate performance negatively.
Ownership structures in family firms
The ownership structures usually adopted by busi-
ness families are likely to differ from the ownership
structures implemented in widely held corporations.
Families’ preferences for particular control struc-
tures will probably affect important corporate
aspects, such as market valuation in listed companies
(Levy 2009). Panel B of Table 2 lists a number of
studies that highlight the importance of family firms’
ownership structures for performance.
Large family business groups are especially preva-
lent in countries with weak institutional environ-
ments (Young et al. 2008a). Therefore, the analysis
of the main agency problems specific to these own-
ership structures is critically important (Morck and
Yeung 2003). In large family business groups, family
members may become entrenched in management
positions, and controlling families may engage in
tunnelling activities (Bae et al. 2002; Bertrand et al.
2002, 2008; Douma et al. 2006). In addition, the
predominance of this type of group can lead to
slower economic growth, because families avoid
investing in new technologies that render obsolete
the technologies that they already own (Morck et al.
2005). The high degree of family ownership that
characterizes most economies may also limit the
ability of a country to take advantage of financial
globalization (Stulz 2005).
Despite the potential adverse consequences of
business groups, their formation, prevalence and
evolution in different environments may be attribut-
able to multiple factors (Khanna and Yafeh 2007).
Owner families prefer those group structures that
provide considerable pay-off and financing advan-
tages (Almeida and Wolfenzon 2006b; Orbay and
Yurtoglu 2006). Masulis et al. (2011) show that firms
held in pyramidal structures have greater investment
intensity compared with firms held in horizontal
structures, which supports the financing advantages
of pyramids. However, the use of control-enhancing
pyramidal structures when shareholder protection is
weak can subvert the positive value impact of good
governance practices (Connelly et al. 2012).
While group affiliation and pyramids can have
either positive or negative effects for family busi-
nesses, especially in emerging markets (Almeida
et al. 2011; Bae et al. 2008; Chacar and Vissa 2005),
the use of control-enhancing mechanisms in general
© 2014 British Academy of Management and John Wiley & Sons Ltd.
11
is most likely to be detrimental to firm performance
(Bennedsen and Nielsen 2010; Lins 2003). For the
particular case of US family firms, Villalonga and
Amit (2009) find that dual-class stock and dispropor-
tionate board representation negatively affect firm
value. Conversely, voting agreements and pyramids
have a positive effect on family firm performance.
These results are consistent with the motives for and
consequences of using control-enhancing mecha-
nisms such as dual-class ownership (Bigelli and
Mengoli 2011). The US results cannot, however, be
applied wholesale to the Canadian context. In
Canada, the use of restricted voting shares and sepa-
ration of ownership from control seem to have no
detrimental effect on performance (Ben-Amar and
André 2006; Jog et al. 2010). In Sweden, the accu-
mulation of voting power (but not the controlling
owner’s excess votes) by large shareholders has a
negative impact on family firm value (Cronqvist and
Nilsson 2003).
The empirical evidence shows that family owners
are able to choose their preferred ownership struc-
tures. The adoption of control-enhancing mecha-
nisms will, in turn, influence corporate performance.
As a result, we argue that the effect of family control
on performance is mediated by family firms’ owner-
ship structures (see Figure 1).
Corporate decision-making in family firms
Additional explanations for the different perfor-
mance of family firms and for how these companies
achieve family owners’ non-economic goals can be
derived from the literature that examines the impact
of family control on a firm’s decisions. This rationale
drives our analysis of the effect of family control on
strategic policies and the subsequent implications for
performance. Panel B of Table 2 shows the studies
that examine corporate decision-making in family
firms.
A firm’s financing policy is an important decision,
but how family and non-family firms differ from
each other in this respect is not clear a priori. Family
involvement in the company may lead to reductions
in the use of debt, because family owners tend to hold
highly undiversified portfolios (Agrawal and
Nagarajan 1990) and because controlling families
want to avoid the monitoring role exerted by credi-
tors (Shyu and Lee 2009). In contrast, family firms
may prefer debt to equity, because family owners
have concerns about the dilution of their control of
the company (Croci et al. 2011; King and Santor
12
2008). The principal–principal conflicts associated
with family ownership can also explain family firms’
preferences for debt, because agency problems
between large and minority shareholders are likely to
be reflected in the value of initial public offering
firms (Roosenboom and Schramade 2006; Yeh et al.
2008; Yu and Zheng 2012). In addition, investors
who only enjoy security benefits of their equity
stakes will be reluctant to invest in family-controlled
companies (Giannetti and Simonov 2006; Leuz et al.
2009), thus making debt a more important source of
funds for family firms. The use of debt is expected to
lower agency costs (Jensen and Meckling 1976) and
thereby lead to better family firm performance.
However, as Margaritis and Psillaki (2010) discuss,
using too much debt may reduce market value as a
result of the increased risk of default.
In addition to debt financing, small family firms
can use venture capital financing (Martí et al. 2013)
and more sophisticated financial products (Di Giuli
et al. 2011). Family firms in general can also obtain
additional funds by holding cash inside the company.
However, the accumulation of excessive cash hold-
ings can be interpreted as a sign of agency problems
(Dittmar et al. 2003) or of family owners’ attempt to
protect their privileged positions (Ozkan and Ozkan
2004). A common method of reducing agency prob-
lems between the controlling family and minority
investors is the distribution of excess cash as divi-
dends (Pindado et al. 2012; Setia-Atmaja et al. 2009;
Yoshikawa and Rasheed 2010).
Family owners’ ability to obtain financing at a
reasonable cost and their dividend decisions, in turn,
affect their investment policies. Specifically, the dif-
ference in debt costs for family firms (Anderson
et al. 2003) provides an explanation for their lower
investment–cash flow sensitivities (Pindado et al.
2011). Regarding investment types, family firms may
be willing to accept more risks than non-family firms
when their socio-emotional wealth is at stake or
when they face threats of imitation (Gomez-Mejia
et al. 2007; Sirmon et al. 2008). However, overall,
family firms seem to prefer investing in physical
assets rather than riskier R&D projects (Belenzon
and Berkovitz 2010; Block 2012; Munari et al.
2010). The risk attitude of controlling families
(Barry et al. 2011) partly explains the lower sensitiv-
ity of family firms to market demand (Cucculelli and
Marchionne 2012) and to market pressure for
downsizing (Greenwood et al. 2010). The lower
investment–cash flow sensitivities of family firms
support the notion that they are less likely to suffer
© 2014 British Academy of Management and John Wiley & Sons Ltd.
J. Pindado and I. Requejo
from underinvestment or overinvestment problems,
and thus they are able to approach the optimal level
of investment and exhibit better firm performance
(Morgado and Pindado 2003). Conversely, the reluc-
tance of family firms to invest in R&D may be det-
rimental in terms of economic outcomes (Pindado
et al. 2010).
Family firms can increase in size by acquiring
new businesses rather than by growing organically
through R&D and capital expenditures. The litera-
ture on mergers and acquisitions concludes that
family control is negatively related to takeover
activity (Caprio et al. 2011; Miller et al. 2010) and
that family firms gain less than their non-family
counterparts from mergers and acquisitions
(Bauguess and Stegemoller 2008; Shim and
Okamuro 2011). Owing to family owners’
undiversified portfolios (Faccio et al. 2011; Holmen
et al. 2007), family businesses prefer to pursue
acquisitions outside their firm’s core industry
(Miller et al. 2010). Nevertheless, the social context
of owners is likely to influence their strategic pri-
orities and determines whether they prefer a growth
strategy, such as acquiring a new business, over a
conservation strategy (Miller et al. 2011). In this
respect, family firms can overcome conservatism by
using their organizational social capital to pursue
innovation and entrepreneurship (Zahra 2010).
The diversification decision is another important
strategic policy for family firms (Miller et al. 2010;
Muñoz-Bullón and Sánchez-Bueno 2012). Whether
diversification contributes to improving the perfor-
mance of the company ultimately depends on the
market in which the firm operates and the type of
diversification (Purkayastha et al. 2012). When
family business owners decide to invest abroad, they
opt for a low equity stake in a foreign affiliate
(Filatotchev et al. 2007). Nevertheless, Gomez-
Mejia et al. (2010) show that family companies
prefer domestic diversification to preserve their
socio-emotional endowment. Similarly, a number of
studies report that family ownership and control are
negatively associated with internationalization
(Bhaumik et al. 2010; Eberhard and Craig 2013)
except when family owner-managers act as stewards
of the firm’s resources (Zahra 2003).
The discussion presented thus far emphasizes the
vital role that family owners play in deciding impor-
tant corporate policies such as financing and invest-
ment decisions. Family firms also differ from non-
family firms in their mergers and acquisitions and
diversification policies. Such differences in strategic
Family Business and Corporate Governance
behaviour can help to explain the different perfor-
mance of family firms, as Figure 1 captures.
Succession process in family firms
The corporate decision of succession has been
widely researched since the early years of the family
business literature (Handler 1994) and continues to
attract further attention (De Massis et al. 2008;
Giambatista et al. 2005; Mitchell et al. 2009).
Although a few family firms have existed for centu-
ries, prior research shows that only a small percent-
age of family firms survive the founder generation
and that an even lower proportion of family
companies reach the third or later generations
(Cabrera-Suárez 2005; Miller et al. 2003). Neverthe-
less, the reasons why controlling families of public
firms sell their remaining ownership stake are not
completely clear (Klasa 2007). Panel B of Table 2
contains several studies that focus on the succession
process of family businesses.
According to Bennedsen et al. (2007), if the first-
born child of a departing CEO is male, the company
is more likely to undergo a family succession, which
confirms that women are rarely considered serious
candidates to succeed to leadership positions
(Martinez 2009). Carefully designing the succession
process is particularly important for family firms,
because the appointment of a family CEO is likely to
be detrimental to performance (Perez-Gonzalez
2006; Smith and Amoako-Adu 1999), whereas
professionalizing the family firm may have the oppo-
site effect (Stewart and Hitt 2012). In fact, family
ownership combined with professional management
is associated with better management practices and
less family infighting (Bloom and Van Reenen 2007;
Lubatkin et al. 2005). Conversely, in second- and
later-generation family firms in which the CEO is
chosen by primogeniture, performance may suffer as
a result of poor management practices (Bloom and
Van Reenen 2007).
In general, theoretical models confirm the superi-
ority of outside professional successors over family
candidates (Burkart et al. 2003). Indeed, owner fami-
lies recognize that professional CEOs can enhance
performance when a family firm requires high mana-
gerial skills (Lin and Hu 2007). Accordingly, second-
generation leaders of highly diversified family
business groups favour the presence of non-family
executives in the group because of their valuable
expertise in a context of market transition (Chung
and Luo 2008b). In addition, the reduction in profit-
© 2014 British Academy of Management and John Wiley & Sons Ltd.
13
ability associated with family business successions is
larger in more competitive sectors (Cucculelli and
Micucci 2008). This finding is in line with the
varying proportion of family firms across industries
(Villalonga and Amit 2010) and suggests that the
benefits of professional management are more pro-
nounced in some sectors.
Complementing previous studies, Hillier and
McColgan (2009) show that, overall, family firms are
associated with lower rates of forced CEO turnover.
In addition, firms with family CEOs are less likely to
forcibly remove their CEOs, even if the company
performs poorly (Gomez-Mejia et al. 2001). These
findings support the literature that reports that execu-
tive turnover and its sensitivity to performance
are lower in family businesses (Denis et al. 1997;
Volpin 2002). Although nepotism is the most widely
accepted explanation for the choice of a family
member as successor, concerns about preservation of
the family’s socio-emotional wealth provide another
argument for family business successions (Zellweger
et al. 2012). In addition, the preference for inside
candidates over outsiders can be an optimal decision
in highly idiosyncratic family firms, where insiders
acquire crucial knowledge and relationships by
working within the company (Agrawal et al. 2006;
Lee et al. 2003). Environmental factors may also
determine the prevalence of family control over time
(Chang et al. 2008; Fan et al. 2011; Franks et al.
2012).
Overall, the empirical evidence discussed suggests
that family firms’ survival as well as their perfor-
mance depends on how family owners plan succes-
sion processes. Therefore, the succession decision
plays a mediating role in the relation between family
control and corporate performance and helps to
explain why family and non-family firms differ in
terms of economic outcomes (see Figure 1).
The moderating role of corporate
governance mechanisms
Moving forward in our discussion, we now investi-
gate how family control interacts with other govern-
ance devices. We pay special attention to internal
governance mechanisms (e.g. the board of directors,
multiple large shareholdings, executive compensa-
tion) because external mechanisms are beyond owner
families’ control and because they are less likely to
play an important role in disciplining controlling
families as a result of the concentrated ownership
14
structures of family firms (Demirag and Serter 2003;
Enriques and Volpin 2007).
Panel C of Table 2 shows the articles that focus on
the role of corporate governance mechanisms in
family firms. These studies suggest that the interac-
tion between family ownership and other control
mechanisms is likely to influence family firms’ per-
formance as well as their choice of ownership struc-
tures and corporate decision-making. In addition,
family firms can determine their fate by choosing the
right combination of governance mechanisms (Van
den Berghe and Carchon 2002), which may differ,
depending on the firms’ specific ownership struc-
tures and the institutional environment (Fernández
and Arrondo 2005; Miguel et al. 2005). The idea that
underlies the moderating effect of corporate govern-
ance mechanisms is that the impact of family control
on business conduct and performance, in terms of
strength and sign, depends on whether family firms
adopt an adequate corporate governance structure.
For instance, Kuo and Hung (2012) conclude that the
relation between family control and the investment–
cash flow sensitivity is moderated by board inde-
pendence. Family control reduces investment–cash
flow sensitivities, but the presence of independent
directors in family firms mitigates the negative effect
of family control.
Anderson and Reeb (2004) investigate the board
of directors and find that board independence has a
positive impact on the value of US family firms.
Despite the benefits of board independence, inde-
pendent directors may be unable to provide a coun-
terbalance to family control when family power
dominates (Cai et al. 2006; Choi et al. 2007; Luo and
Chung 2013). Also, when investor protection is rela-
tively weak, boards that are closely linked to the
controlling family are associated with negative
entrenchment effects (Yeh and Woidtke 2005; Young
et al. 2008b). Surprisingly, board independence is
negatively correlated with performance for Canadian
family firms (Klein et al. 2005b). Indeed, some level
of family board representation is desirable because
family members have firm-specific knowledge and
can transmit the family’s culture and values to the
rest of the management team (Arregle et al. 2007;
Loderer and Waelchli 2010).
Despite the substantial amount of attention paid to
the monitoring role of boards, board directors also
play an important role as advisers and providers of
resources (Blumentritt 2006; Corbetta and Salvato
2004). The advising role of the board is perceived as
more important in family SMEs because board
© 2014 British Academy of Management and John Wiley & Sons Ltd.
J. Pindado and I. Requejo
members can compensate for managerial deficien-
cies (Van den Heuvel et al. 2006; Voordeckers et al.
2007). In contrast, the value premium attributable to
independent directors in public family firms appears
to be explained by their monitoring role (Young et al.
2008b). However, an infinite level of board monitor-
ing is not necessarily in the best interest of family
firms’ shareholders, because it can hamper value
creation through certain channels that are unique
to family businesses such as political connections
(Bunkanwanicha and Wiwattanakantang 2009;
Faccio 2006; Xu et al. 2013) and networking rela-
tionships with bureaucratic officials (Acquaah 2012).
Moreover, family businesses can use governance
mechanisms other than board composition, such as
the payment of dividends (Faccio et al. 2001;
Pindado et al. 2012; Setia-Atmaja et al. 2009), to
address owners’ self-control problems (Lubatkin
et al. 2007).
In addition to board composition, the presence of
multiple large owners inside the company has an
impact on firm value (Konijn et al. 2011; Laeven and
Levine 2008). Within firms with concentrated own-
ership structures (e.g. family firms), blockholders
other than the controlling owner can act as a govern-
ance mechanism that monitors the largest sharehold-
er’s decisions (Attig et al. 2008; Mishra 2011).
However, the beneficial effect of other large share-
holders for family firms depends on their identities
(Maury and Pajuste 2005; Pindado et al. 2011). If the
second or third largest investors in family firms are
also family shareholders, firm performance is nega-
tively affected (Jara-Bertin et al. 2008). Conversely,
non-family shareholders who perform a monitoring
role may enhance the value of family companies
(Wong et al. 2010).
Executive compensation is another internal gov-
ernance mechanism frequently used to alleviate
agency problems, even in private family firms
(Michiels et al. 2013). Although some theoretical
arguments suggest that family firms pay family man-
agers more than non-family managers (Chua et al.
2009), empirical evidence shows that executive
compensation is lower in family firms (Carrasco-
Hernandez and Sánchez-Marín 2007; Frydman and
Saks 2010; Sapp 2008). In fact, Gomez-Mejia et al.
(2003) suggest that executive compensation is a less
effective control mechanism in the context of family
businesses, which may be due in part to the infre-
quent use of explicit compensation arrangements
in family-controlled companies (Kole 1997) and
family owners’ reluctance to use equity-based
Family Business and Corporate Governance 15

compensation schemes (Bryan et al. 2010; Chizema
2010). Moreover, executive pay can be used to
extract private benefits at shareholders’ expense in
corporations with a higher divergence between
insider voting and cash flow rights (Masulis et al.
2009). Hence, in family firms with these ownership
structures, higher executive compensation may lead
to value discounts, whereas a reduction in compen-
sation can result in market valuation increases.
In sum, traditional governance mechanisms (e.g.
the board of directors, executive compensation) and
other mechanisms more recently identified in the lit-
erature (e.g. multiple large shareholdings) seem to
determine how family control affects corporate per-
formance and other firm dimensions. Hence, we
propose that the governance mechanisms adopted by
owner families influence the differences between
family and non-family businesses with respect to
their performance and corporate decision-making
(see Figure 1). Furthermore, not all control mecha-
nisms are effective at alleviating family firms’
agency conflicts. Therefore, these companies need to
find their own combination of corporate governance
devices to reassure stakeholders and guarantee the
survival of the company over a longer period of time.
Discussion and promising avenues
for future research
The manifold relations, mediating roles and moder-
ating effects among family control and other corpo-
rate dimensions depicted in Figure 1 can help to
clarify the mixed empirical evidence on the positive
and negative aspects of the family business govern-
ance system. Taking our analysis as a starting point,
we identify future strands of research, which we
explain in the following discussion. Figure 2 graphi-
cally represents the suggested strands of research.
First, we emphasize the need for a multidisciplinary
view of the family firm to consolidate the family
business domain as a distinctive scientific field.
Second, future work should identify the external
factors that explain the prevalence of family firms
around the world. Third, we must improve our under-
standing of how the internal dimensions of family
companies interact with each other to determine the
behaviour of these firms. Fourth, although the family
business literature widely recognizes the heterogene-
ous character of public family firms, we require new
empirical evidence on how public and private family
businesses compare with each other. Finally, we

1. Multidisciplinary
analysis of family firms

Ownership
structure
National National
culture culture
Corporate
governance
mechanisms

Family Corporate Institutional

Institutional Family Firm
business outcomes of context and
framework control performance
culture family firms economic cycle
Corporate
governance
mechanisms

Formal Formal
institutions Strategic institutions
decisions

Succession
process

2. Antecedents of the family 3. Holistic analysis of the family 4. Private vs. public 5. Consequences of the family
business governance system business governance system family firms business governance system

Direct effect
Mediating effect
Moderating effect

Figure 2. Promising avenues for future research on the family business governance system

© 2014 British Academy of Management and John Wiley & Sons Ltd.
16
propose the need to extend beyond the borders of the
family firm to identify the main consequences of the
family business governance system for the external
environment.
Multidisciplinary analysis of family firms
Scholars from closely related disciplines such as
finance and management should cooperate with each
other to develop a theory of the family business gov-
ernance system that is widely accepted across disci-
plines. While management scholars have been more
active in the development of theoretical propositions
that attempt to explain family firm behaviour, the
majority of family business studies in finance are
empirical. Most empirical finance research is based
on agency arguments, whereas management works
use various theories to analyse family firms. There-
fore, agency theory could be a good starting point in
the challenging task of proposing a unique theory
of the family firm, because agency arguments prevail
in the study of governance topics (Daily et al. 2003),
and the flexibility of agency theory enables its exten-
sion to non-traditional contexts (Gedajlovic and
Carney 2010).
However, a single theoretical framework is not
sufficient to gain a full understanding of the complex
phenomenon of family businesses. Therefore, we
encourage cross-fertilization across the different
social sciences, and interdisciplinary collaboration
among family business scholars (see Figure 2, Point
1), because this approach can improve the quality of
family business investigations and can lead to crea-
tion of new knowledge and the emergence of a new
discipline (Siedlok and Hibbert 2013). Although the
literature widely recognizes that family businesses
are the result of combining family and business
systems (Basco and Pérez-Rodríguez 2009;
Hollander and Elman 1988), the governance litera-
ture has focused mainly on the business component
of family firms.
Accordingly, future research should borrow the
theories and methodologies of other disciplines,
including psychology, sociology, business history
and law, which may be particularly suitable for inves-
tigating the family component of family firms
(Moores 2009) and may provide new insight into the
family business phenomenon. Family relations,
norms and values can be crucial to the workings and
development of the business (Cruz et al. 2012; Hall
and Nordqvist 2008). An interdisciplinary approach
that gives more importance to the family dimension
© 2014 British Academy of Management and John Wiley & Sons Ltd.
J. Pindado and I. Requejo
of family firms may shape the research agenda by
emphasizing the family and the individual as the unit
of analysis. Given that decision-making resides in
individuals, future family business literature should
investigate how the background and principles of
family managers influence the governance structures
implemented within the company to assure its sur-
vival in the long run.
Antecedents of the family business
governance system
This review discusses how family ownership
interacts with other internal control mechanisms
to determine firm outcomes. Panel A of Appendix 3
summarizes the main corporate governance
mechanisms examined in family business research.
Ownership concentration, which includes family
ownership, is the most widely researched governance
device (considered in 39.9% of the works), followed
by insider ownership and the board of directors.
Panel A shows that, thus far, external governance
mechanisms have received scarce attention in the
family business literature (14.3%). Only the legal
system has been given due consideration by a note-
worthy proportion of finance studies. The interest of
finance researchers in this topic is mainly attributable
to the relevance of the law and finance literature (La
Porta et al. 1998). A better understanding of how
family control of corporations shapes and is shaped
by external governance institutions will help to
explain the existence and evolution of the family
business governance system.
In this context, the reasons for the predominance
of family businesses all over the world constitute a
topic that deserves careful consideration. Therefore,
we propose the need to examine the external factors
that determine family control of corporations (see
Figure 2, Point 2). Although some studies provide
some hints on how the institutional context may
affect the prevalence of family firms (Chang et al.
2008; Franks et al. 2012), this area requires further
attention. Whether informal institutions, such as
cultural norms and values embedded in a country’s
society, explain the likelihood that firms are set up
as family businesses is unclear. In addition, future
research can investigate to what extent the legal
system and formal institutions implemented by gov-
ernments determine a firm’s ownership structure.
Similarly, understanding whether the survival of
family firms is a function of the institutional
context is vitally important to disentangle the role
Family Business and Corporate Governance
of policy-makers in ensuring the success of family
companies.
Holistic analysis of the family business
governance system
Our coverage of family business works published in
highly ranked finance and management journals
ensures that the empirical evidence discussed in the
review has been obtained using a rigorous scientific
approach. However, one of the main challenges for
future family business research is to adopt new meth-
odologies that enable a holistic analysis of the family
business governance system. Although the use of
ordinary least squares as a regression method pre-
vails (see Panel B of Appendix 3), significant differ-
ences exist across the finance and management
disciplines. More than 50% of management works
rely on standard ordinary least squares. In contrast,
the proportion of finance articles that employ some
kind of instrumental variable method is relatively
large (29.6% vs. 15.5%).
Every family business study should address two
important econometrical problems to avoid drawing
biased conclusions: unobserved heterogeneity and
endogeneity (Coles et al. 2012). Unobserved hetero-
geneity is of great concern because, in most cases, it
is correlated with some of the explanatory variables
in the model. One possible strategy to mitigate this
problem is to use an adequate panel data method. The
endogeneity problem is mainly due to the difficulty
of establishing causal relations between the explana-
tory and the explained phenomena. The traditional
approach to alleviate this problem is to use an instru-
mental variable method (Becker et al. 2011; Wintoki
et al. 2012). Panel C of Appendix 3 shows that, when
we classify articles depending on whether their
authors discuss and attempt to alleviate endogeneity
concerns, more than half of finance studies (52.8%)
address this problem compared with around one-
third of management works (35.9%).
As we argue throughout this review, the influence
of family control on corporate performance may be
determined by how controlling families structure
their companies and make strategic decisions. In
turn, all these relations depend on the governance
devices used by family firms and on the external
environment. Consequently, further investigation on
the interrelations among corporate governance
mechanisms is necessary to determine the optimal
governance structure for a particular firm (Denis and
McConnell 2003) and to obtain a broader overview
© 2014 British Academy of Management and John Wiley & Sons Ltd.
17
of the family business governance system (see
Figure 2, Point 3). Many questions on the direct and
indirect effects of family control on business conduct
still remain. The family business literature could
borrow the strategies and econometrical tools devel-
oped in other fields to overcome the methodological
difficulties that arise when investigating several rela-
tions simultaneously (Pindado and de la Torre 2006).
In particular, family business research could derive
great benefits from testing the new theoretical propo-
sitions developed by management scholars with
the rigorous estimation methods used by finance
researchers, thus reinforcing the need for cross-
fertilization across disciplines.
Private vs. public family firms
Another promising avenue for future research con-
sists of formally analysing the differences between
private and public family firms (Schulze et al.
2003b). Although prior research suggests that large
and small family businesses may differ from each
other (Hamelin 2011; Romano et al. 2001), more
explicit evidence in this respect is required (see
Figure 2, Point 4). Whether differences in govern-
ance structures and performance between family and
non-family firms apply to both listed and unlisted
family firms or only to one of them is of particular
importance (Loderer and Waelchli 2010; Stewart and
Hitt 2012). We also need to understand the motives
that lead some private family companies to become
publicly listed corporations and the implications of
such a decision (Aslan and Kumar 2011; Bancel and
Mittoo 2009). This knowledge can help family firms
avoid an early demise.
An important challenge in the analysis of private
family firms is data availability. The widespread reli-
ance on secondary sources of data and commercial
databases in particular (see Panel A of Appendix 4)
explains why most family business studies focus on
public family firms. The use of secondary data is
much more common in finance than in management
works (89.8% vs. 57.8%). This remarkable differ-
ence may be due to the type of firm investigated.
Given that management research has paid more
attention to private family firms, scholars from this
discipline rely on survey data more frequently.
Regardless of the type of company analysed and the
data source used, the empirical studies reviewed
herein adopt rigorous data collection techniques. As
Panel A of Appendix 4 highlights, a prominent
proportion of articles use information from multiple
18
sources. However, the difficulty in obtaining data on
family SMEs calls for joint efforts from family busi-
ness researchers. Building new data sets comparable
across firm categories will help to clarify whether the
proposed family business definitions are applicable
to private and public family firms alike. Future
research could also explore the primary goals of both
family firm types to disentangle the relevance of
non-economic objectives for each of them.
Consequences of the family business
governance system
More conclusive results on the economic and finan-
cial implications of the ubiquity of family control are
warranted (Mayer 2008; Morck et al. 2011) and will
be of particular interest to economists and politi-
cians, given the ongoing debate on how to achieve
economic growth and job creation (Allen et al.
2005). New valuable evidence may also be obtained
by exploring whether the consequences of family
control for the environment depend on the institu-
tional context and the stage of the economic cycle.
The turmoil that has affected most economies around
the world during the recent financial crisis has
created a unique scenario for this type of investiga-
tion. Therefore, the final strand of research proposed
refers to the consequences of family control beyond
the borders of the family business (see Figure 2,
Point 5).
Despite the difficulty of establishing clear-cut
regional variations on the implications of the family
business model, several works suggest that family
control may only be optimal from minority share-
holders’ perspective in protective institutional envi-
ronments that limit the use of control-enhancing
mechanisms. Hence, the benefits of family control
should outweigh its costs in countries with well-
functioning markets and institutions, such as the
USA and Western Europe, whereas this form of gov-
ernance is more likely to be detrimental in East Asia.
Contradicting this view, another strand of research
contends that, in regions with lower levels of finan-
cial and institutional development (e.g. some East
Asian nations) family firms fill the institutional voids
and constitute an adequate ownership structure.
In this context of conflicting empirical evidence,
one possible strategy to analyse how family firms
influence the environment in which they operate is
the use of cross-country data. Panel B of Appendix 4
shows that the majority of cross-country finance
studies cover between 10 and 30 countries, whereas
© 2014 British Academy of Management and John Wiley & Sons Ltd.
J. Pindado and I. Requejo
most management works analyse between 2 and 10
countries. However, this panel also shows that,
overall, family business studies tend to investigate
one single country (74.1%). The USA has received
the most attention, followed by Western European
and East Asian countries. One noteworthy conclu-
sion that can be derived from Panels B and C is that
cross-country research is more common among
finance articles than among management articles
(33.3% vs. 17.8%). This type of research should be
promoted to enhance understanding of the implica-
tions of family control for the external environment.
In addition, the role of family firms in economies that
may become global powers in the near future, such as
African and Central and South American nations,
deserves careful consideration.
References
Achleitner, A.-K., Betzer, A., Goergen, M. and
Hinterramskogler, B. (2013). Private equity acquisitions
of continental European firms: the impact of ownership
and control on the likelihood of being taken private. Euro-
pean Financial Management, doi: 10.1111/j.1468-
036X.2010.00569.x.
Acquaah, M. (2012). Social networking relationships, firm-
specific managerial experience and firm performance in a
transition economy: a comparative analysis of family
owned and nonfamily firms. Strategic Management
Journal, 33, pp. 1215–1228.
Adams, R.B., Almeida, H. and Ferreira, D. (2005). Powerful
CEOs and their impact on corporate performance. Review
of Financial Studies, 18, pp. 1403–1432.
Agrawal, A., Knoeber, C.R. and Tsoulouhas, T. (2006). Are
outsiders handicapped in CEO successions? Journal of
Corporate Finance, 12, pp. 619–644.
Agrawal, A. and Nagarajan, N.J. (1990). Corporate capital
structure, agency costs, and ownership control: the case
of all-equity firms. Journal of Finance, 45, pp. 1325–
1331.
Ali, A., Chen, T.Y. and Radhakrishnan, S. (2007). Corporate
disclosures by family firms. Journal of Accounting and
Economics, 44, pp. 238–286.
Allen, F., Qian, J. and Qian, M. (2005). Law, finance, and
economic growth in China. Journal of Financial Econom-
ics, 77, pp. 57–116.
Almeida, H.V., Park, S.Y., Subrahmanyam, M.G. and
Wolfenzon, D. (2011). The structure and formation of
business groups: evidence from Korean chaebols. Journal
of Financial Economics, 99, pp. 447–475.
Almeida, H.V. and Wolfenzon, D. (2006a). Should business
groups be dismantled? The equilibrium costs of efficient
internal capital markets. Journal of Financial Economics,
79, pp. 99–144.
Family Business and Corporate Governance
Almeida, H.V. and Wolfenzon, D. (2006b). A theory of
pyramidal ownership and family business groups. Journal
of Finance, 61, pp. 2637–2680.
Alpay, G., Bodur, M., Yilmaz, C., Çetinkaya, S. and Arikan,
L. (2008). Performance implications of institutionaliza-
tion process in family-owned businesses: evidence from
an emerging economy. Journal of World Business, 43, pp.
435–448.
Amoako-Adu, B., Baulkaran, V. and Smith, B.F. (2011).
Executive compensation in firms with concentrated
control: the impact of dual class structure and family
management. Journal of Corporate Finance, 17, pp.
1580–1594.
Amoako-Adu, B. and Smith, B.F. (2001). Dual class firms:
capitalization, ownership structure and recapitalization
back into single class. Journal of Banking and Finance,
25, pp. 1083–1111.
Amore, M.D., Minichilli, A. and Corbetta, G. (2011). How
do managerial successions shape corporate financial poli-
cies in family firms? Journal of Corporate Finance, 17,
pp. 1016–1027.
Anderson, R.C. and Reeb, D.M. (2003). Founding-family
ownership and firm performance: evidence from the S&P
500. Journal of Finance, 58, pp. 1301–1328.
Anderson, R.C. and Reeb, D.M. (2004). Board composition:
balancing family influence in S&P 500 Firms. Adminis-
trative Science Quarterly, 49, pp. 209–237.
Anderson, R.C., Duru, A. and Reeb, D.M. (2009). Founders,
heirs, and corporate opacity in the United States. Journal
of Financial Economics, 92, pp. 205–222.
Anderson, R.C., Duru, A. and Reeb, D.M. (2012a). Invest-
ment policy in family controlled firms. Journal of
Banking and Finance, 36, pp. 1744–1758.
Anderson, R.C., Mansi, S.A. and Reeb, D.M. (2003). Found-
ing family ownership and the agency cost of debt. Journal
of Financial Economics, 68, pp. 263–285.
Anderson, R.C., Reeb, D.M. and Zhao, W. (2012b). Family-
controlled firms and informed trading: evidence from
short sales. Journal of Finance, 67, pp. 351–385.
Andres, C. (2008). Large shareholders and firm
performance−an empirical examination of founding-
family ownership. Journal of Corporate Finance, 14, pp.
431–445.
Ang, J.S., Cole, R.A. and Lin, J.W. (2000). Agency costs and
ownership structure. Journal of Finance, 55, pp. 81–106.
Antia, M., Pantzalis, C. and Park, J.C. (2010). CEO decision
horizon and firm performance: an empirical investigation.
Journal of Corporate Finance, 16, pp. 288–301.
Arregle, J.L., Hitt, M.A., Sirmon, D.G. and Very, P. (2007).
The development of organizational social capital: attrib-
utes of family firms. Journal of Management Studies, 44,
pp. 73–95.
Aslan, H. and Kumar, P. (2011). Lemons or cherries?
Growth opportunities and market temptations in going
public and private. Journal of Financial and Quantitative
Analysis, 46, pp. 489–526.
© 2014 British Academy of Management and John Wiley & Sons Ltd.
19
Aslan, H. and Kumar, P. (2012). Strategic ownership struc-
ture and the cost of debt. Review of Financial Studies, 25,
pp. 2257–2299.
Attig, N., Guedhami, O. and Mishra, D. (2008). Multiple
large shareholders, control contests, and implied cost of
equity. Journal of Corporate Finance, 14, pp. 721–737.
Bae, G.S., Cheon, Y.S. and Kang, J.-K. (2008). Intragroup
propping: evidence from the stock-price effects of earn-
ings announcements by Korean business groups. Review
of Financial Studies, 21, pp. 2015–2060.
Bae, K.-H., Kang, J.-K. and Kim, J.-M. (2002). Tunneling or
value added? Evidence from mergers by Korean business
groups. Journal of Finance, 57, pp. 2695–2740.
Baek, J.-S., Kang, J.-K. and Park, K.S. (2004). Corporate
governance and firm value: evidence from the Korean
financial crisis. Journal of Financial Economics, 71,
pp. 265–313.
Bammens, Y., Voordeckers, W. and Van Gils, A. (2011).
Boards of directors in family businesses: a literature
review and research agenda. International Journal of
Management Reviews, 13, pp. 134–152.
Banalieva, E.R. and Eddleston, K.A. (2011). Home-region
focus and performance of family firms: the role of family
vs. non-family leaders. Journal of International Business
Studies, 42, pp. 1060–1072.
Bancel, F. and Mittoo, U.R. (2009). Why do European
firms go public? European Financial Management, 15,
pp. 844–884.
Barontini, R. and Caprio, L. (2006). The effect of family
control on firm value and performance: evidence from
continental Europe. European Financial Management,
12, pp. 689–723.
Barry, T.A., Lepetit, L. and Tarazi, A. (2011). Ownership
structure and risk in publicly held and privately owned
banks. Journal of Banking and Finance, 35, pp. 1327–
1340.
Barth, E., Gulbrandsen, T. and Schone, P. (2005).
Family ownership and productivity: the role of owner-
management. Journal of Corporate Finance, 11, pp. 107–
127.
Bartholomeusz, S. and Tanewski, G.A. (2006). The relation-
ship between family firms and corporate governance.
Journal of Small Business Management, 44, pp. 245–
267.
Basco, R. and Pérez-Rodríguez, M.J. (2009). Studying the
family enterprise holistically: evidence for integrated
family and business systems. Family Business Review, 22,
pp. 82–95.
Basu, N., Dimitrova, L. and Paeglis, I. (2009). Family
control and dilution in mergers. Journal of Banking and
Finance, 33, pp. 829–841.
Bauguess, S. and Stegemoller, M. (2008). Protective gov-
ernance choices and the value of acquisition activity.
Journal of Corporate Finance, 14, pp. 550–566.
Becker, B., Cronqvist, H. and Fahlenbrach, R. (2011).
Estimating the effects of large shareholders using a
20
geographic instrument. Journal of Financial and Quanti-
tative Analysis, 46, pp. 907–942.
Belenzon, S. and Berkovitz, T. (2010). Innovation in busi-
ness groups. Management Science, 56, pp. 519–535.
Ben-Amar, W. and André, P. (2006). Separation of owner-
ship from control and acquiring firm performance: the
case of family ownership in Canada. Journal of Business,
Finance and Accounting, 33, pp. 517–543.
Bennedsen, M. and Nielsen, K.M. (2010). Incentive and
entrenchment effects in European ownership. Journal of
Banking and Finance, 34, pp. 2212–2229.
Bennedsen, M., Nielsen, K.M., Perez-Gonzalez, F. and
Wolfenzon, D. (2007). Inside the family firm: the role of
families in succession decisions and performance. Quar-
terly Journal of Economics, 122, pp. 647–691.
Berrone, P., Cruz, C. and Gomez-Mejia, L.R. (2012).
Socioemotional wealth in family firms: theoretical
dimensions, assessment approaches, and agenda for
future research. Family Business Review, 25, pp. 258–
279.
Berrone, P., Cruz, C., Gomez-Mejia, L.R. and
Larraza-Kintana, M. (2010). Socioemotional wealth and
corporate responses to institutional pressures: do family-
controlled firms pollute less? Administrative Science
Quarterly, 55, pp. 82–113.
Bertrand, M. and Schoar, A. (2006). The role of family in
family firms. Journal of Economic Perspectives, 20, pp.
73–96.
Bertrand, M., Johnson, S., Samphantharak, K. and Schoar,
A. (2008). Mixing family with business: a study of Thai
business groups and the families behind them. Journal of
Financial Economics, 88, pp. 466–498.
Bertrand, M., Mehta, P. and Mullainathan, S. (2002). Ferret-
ing out tunneling: an application to Indian business
groups. Quarterly Journal of Economics, 117, pp. 121–
148.
Bhaumik, S.K., Driffield, N. and Pal, S. (2010). Does own-
ership structure of emerging-market firms affect their
outward FDI? The case of the Indian automotive and
pharmaceutical sectors. Journal of International Business
Studies, 41, pp. 437–450.
Bigelli, M. and Mengoli, S. (2011). Self-expropriation
versus self-interest in dual-class voting: the Pirelli case
study. Financial Management, 40, pp. 677–699.
Bird, B., Welsch, H., Astrachan, J.H. and Pistrui, D. (2002).
Family business research: the evolution of an academic
field. Family Business Review, 15, pp. 337–350.
Bjuggren, P.-O. and Palmberg, J. (2010). The impact of vote
differentiation on investment performance in listed family
firms. Family Business Review, 23, pp. 327–340.
Block, J.H. (2011). How to pay nonfamily managers in large
family firms: a principal–agent model. Family Business
Review, 24, pp. 9–27.
Block, J.H. (2012). R&D investments in family and founder
firms: an agency perspective. Journal of Business Ventur-
ing, 27, pp. 248–265.
© 2014 British Academy of Management and John Wiley & Sons Ltd.
J. Pindado and I. Requejo
Bloom, N. and Van Reenen, J. (2007). Measuring and
explaining management practices across firms and
countries. Quarterly Journal of Economics, 122,
pp. 1351–1408.
Blumentritt, T. (2006). The relationship between boards and
planning in family businesses. Family Business Review,
19, pp. 65–72.
Bocatto, E., Gispert, C. and Rialp, J. (2010). Family-owned
business succession: the influence of pre-performance in
the nomination of family and nonfamily members: evi-
dence from Spanish firms. Journal of Small Business
Management, 48, pp. 497–523.
Bona-Sánchez, C., Pérez-Alemán, J. and Santana-
Martín, D.J. (2011). Defence measures and earnings
management in an owner dominant context. Journal
of Business, Finance and Accounting, 38, pp. 765–
793.
Boubaker, S. and Labégorre, F. (2008). Ownership structure,
corporate governance and analyst following: a study of
French listed firms. Journal of Banking and Finance, 32,
pp. 961–976.
Boubakri, N. and Ghouma, H. (2010). Control/ownership
structure, creditor rights protection, and the cost of debt
financing: international evidence. Journal of Banking and
Finance, 34, pp. 2481–2499.
Boubakri, N., Guedhami, O. and Mishra, D. (2010). Family
control and the implied cost of equity: evidence before
and after the Asian financial crisis. Journal of Interna-
tional Business Studies, 41, pp. 451–474.
Bozec, Y. and Laurin, C. (2008). Large shareholder
entrenchment and performance: empirical evidence from
Canada. Journal of Business, Finance and Accounting,
35, pp. 25–49.
Braun, M. and Sharma, A. (2007). Should the CEO also be
chair of the board? An empirical examination of family-
controlled public firms. Family Business Review, 20,
pp. 111–126.
Bryan, S., Nash, R. and Patel, A. (2010). How the legal
system affects the equity mix in executive compensation.
Financial Management, 39, pp. 393–418.
Bunkanwanicha, P. and Wiwattanakantang, Y. (2009). Big
business owners in politics. Review of Financial Studies,
22, pp. 2133–2168.
Burkart, M., Panunzi, F. and Shleifer, A. (2003). Family
firms. Journal of Finance, 58, pp. 2167–2201.
Cabrera-Suárez, K. (2005). Leadership transfer and the suc-
cessor’s development in the family firm. The Leadership
Quarterly, 16, pp. 71–96.
Cai, C.X., Keasey, K. and Short, H. (2006). Corporate
governance and information efficiency in security mar-
kets. European Financial Management, 12, pp. 763–
787.
Caprio, L. and Croci, E. (2008). The determinants of
the voting premium in Italy: the evidence from 1974 to
2003. Journal of Banking and Finance, 32, pp. 2433–
2443.
Family Business and Corporate Governance
Caprio, L., Croci, E. and Del Giudice, A. (2011). Ownership
structure, family control, and acquisition decisions.
Journal of Corporate Finance, 17, pp. 1636–1657.
Carney, M. (2005). Corporate governance and competitive
advantage in family-controlled firms. Entrepreneurship
Theory and Practice, 29, pp. 249–265.
Carrasco-Hernandez, A. and Sánchez-Marín, G. (2007). The
determinants of employee compensation in family firms:
empirical evidence. Family Business Review, 20, pp. 215–
228.
Casillas, J. and Acedo, F. (2007). Evolution of the intellec-
tual structure of family business literature: a bibliometric
study of FBR. Family Business Review, 20, pp. 141–162.
Chacar, A. and Vissa, B. (2005). Are emerging economies
less efficient? Performance persistence and the impact of
business group affiliation. Strategic Management Journal,
26, pp. 933–946.
Chaney, P.K., Faccio, M. and Parsley, D. (2011). The quality
of accounting information in politically connected firms.
Journal of Accounting and Economics, 51, pp. 58–
76.
Chang, E.P.C., Chrisman, J.J., Chua, J.H. and Kellermanns,
F.W. (2008). Regional economy as a determinant of the
prevalence of family firms in the United States: a prelimi-
nary report. Entrepreneurship Theory and Practice, 32,
pp. 559–573.
Chang, S.J. (2003). Ownership structure, expropriation, and
performance of group-affiliated companies in Korea.
Academy of Management Journal, 46, pp. 238–253.
Chen, C.J.P., Li, Z., Su, X. and Sun, Z. (2011). Rent-seeking
incentives, corporate political connections, and the
control structure of private firms: Chinese evidence.
Journal of Corporate Finance, 17, pp. 229–243.
Chen, E.T. and Nowland, J. (2010). Optimal board monitor-
ing in family-owned companies: evidence from Asia. Cor-
porate Governance: An International Review, 18,
pp. 3–17.
Chen, H.-L. and Hsu, W.-T. (2009). Family ownership, board
independence, and R&D investment. Family Business
Review, 22, pp. 347–362.
Chen, S., Chen, X. and Cheng, Q. (2008). Do family firms
provide more or less voluntary disclosure? Journal of
Accounting Research, 46, pp. 499–536.
Chen, S., Chen, X., Cheng, Q. and Shevlin, T. (2010). Are
family firms more tax aggressive than non-family firms?
Journal of Financial Economics, 95, pp. 41–61.
Chen, Y.-R., Huang, Y.-L. and Chen, C.-N. (2009). Financ-
ing constraints, ownership control, and cross-border
M&As: evidence from nine East Asian economies.
Corporate Governance: An International Review, 17,
pp. 665–680.
Chiang, H.-T. and He, L.-J. (2010). Board supervision capa-
bility and information transparency. Corporate Govern-
ance: An International Review, 18, pp. 18–31.
Chiang, M.-H. and Lin, J.-H. (2007). The relationship
between corporate governance and firm productivity:
© 2014 British Academy of Management and John Wiley & Sons Ltd.
21
evidence from Taiwan’s manufacturing firms. Corporate
Governance: An International Review, 15, pp. 768–779.
Chirico, F., Sirmon, D.G., Sciascia, S. and Mazzola, P.
(2011). Resource orchestration in family firms: investigat-
ing how entrepreneurial orientation, generational involve-
ment, and participative strategy affect performance.
Strategic Entrepreneurship Journal, 5, pp. 307–326.
Chizema, A. (2010). Early and late adoption of American-
style executive pay in Germany: governance and institu-
tions. Journal of World Business, 45, pp. 9–18.
Choi, J.J., Park, S.W. and Yoo, S.S. (2007). The value of
outside directors: evidence from corporate governance
reform in Korea. Journal of Financial and Quantitative
Analysis, 42, pp. 941–962.
Chrisman, J.J., Chua, J.H. and Kellermanns, F.W. (2009).
Priorities, resource stocks, and performance in family and
nonfamily firms. Entrepreneurship Theory and Practice,
33, pp. 739–760.
Chrisman, J.J., Chua, J.H., Kellermanns, F.W., Matherne, III,
C.F. and Debicki, B.J. (2008). Management journals as
venues for publication of family business research. Entre-
preneurship Theory and Practice, 32, pp. 927–934.
Chrisman, J.J., Chua, J.H. and Litz, R. (2003). A unified
systems perspective of family firm performance: an
extension and integration. Journal of Business Venturing,
18, pp. 467–472.
Chrisman, J.J., Chua, J.H., Pearson, A.W. and Barnett, T.
(2012). Family involvement, family influence, and family-
centered non-economic goals in small firms. Entrepre-
neurship Theory and Practice, 36, pp. 267–293.
Chrisman, J.J., Chua, J.H. and Sharma, P. (2005). Trends and
directions in the development of a strategic management
theory of the family firm. Entrepreneurship Theory and
Practice, 29, pp. 555–576.
Chrisman, J.J., Kellermanns, F.W., Chan, K.C. and Liano, K.
(2010). Intellectual foundations of current research
in family business: an identification and review of
25 influential articles. Family Business Review, 23,
pp. 9–26.
Chua, J.H., Chrisman, J.J. and Bergiel, E.B. (2009). An
agency theoretic analysis of the professionalized family
firm. Entrepreneurship Theory and Practice, 33, pp. 355–
372.
Chua, J.H., Chrisman, J.J., Kellermanns, F. and Wu, Z.
(2011). Family involvement and new venture debt financ-
ing. Journal of Business Venturing, 26, pp. 472–488.
Chung, C.-N. and Luo, X. (2008a). Institutional logics or
agency costs: the influence of corporate governance
models on business group restructuring in emerging
economies. Organization Science, 19, pp. 766–784.
Chung, C.-N. and Luo, X. (2008b). Human agents: contexts,
and institutional change: the decline of family in the lead-
ership of business groups. Organization Science, 19,
pp. 124–142.
Claessens, S. and Tzioumis, K. (2006). Ownership and
financing structures of listed and large non-listed
22
corporations. Corporate Governance: An International
Review, 14, pp. 266–276.
Claessens, S., Djankov, S., Fan, J.P.H. and Lang, L.H.P.
(2002). Disentangling the incentive and entrenchment
effects of large shareholdings. Journal of Finance, 57,
pp. 2741–2771.
Claessens, S., Djankov, S. and Lang, L.H.P. (2000). The
separation of ownership and control in East Asian corpo-
rations. Journal of Financial Economics, 58, pp. 81–
112.
Coles, J.L., Lemmon, M.L. and Meschke, J.F. (2012).
Structural models and endogeneity in corporate finance:
the link between managerial ownership and corporate per-
formance. Journal of Financial Economics, 103, pp. 149–
168.
Combs, J.G. (2008). Commentary: the servant, the parasite,
and the enigma: a tale of three ownership structures and
their affiliate directors. Entrepreneurship Theory and
Practice, 32, pp. 1027–1033.
Combs, J.G., Penney, C.R., Crook, T.R. and Short, J.C.
(2010). The impact of family representation on CEO com-
pensation. Entrepreneurship Theory and Practice, 34,
pp. 1125–1144.
Connelly, B.L., Hoskisson, R.E., Tihanyi, L. and Certo, S.T.
(2010). Ownership as a form of corporate gover-
nance. Journal of Management Studies, 47, pp. 1561–
1589.
Connelly, J.T., Limpaphayom, P. and Nagarajan, N.J. (2012).
Form versus substance: the effect of ownership structure
and corporate governance on firm value in Thailand.
Journal of Banking and Finance, 36, pp. 1722–1743.
Corbetta, G. and Salvato, C.A. (2004). The board of direc-
tors in family firms: one size fits all? Family Business
Review, 17, pp. 119–134.
Craig, J.B. and Salvato, C. (2012). The distinctiveness,
design, and direction of family business research: insights
from management luminaries. Family Business Review,
25, pp. 109–116.
Craig, J.B., Dibrell, C. and Davis, P.S. (2008). Leveraging
family-based brand identity to enhance firm competitive-
ness and performance in family businesses. Journal of
Small Business Management, 46, pp. 351–371.
Croci, E. and Del Giudice, A. (2013). Delistings, controlling
shareholders and firm performance in Europe. European
Financial Management, 20, pp. 374–405.
Croci, E., Doukas, J.A. and Gonenc, H. (2011). Family
control and financing decisions. European Financial
Management, 17, pp. 860–897.
Cronqvist, H. and Nilsson, M. (2003). Agency costs of con-
trolling minority shareholders. Journal of Financial and
Quantitative Analysis, 38, pp. 695–719.
Cronqvist, H. and Nilsson, M. (2005). The choice between
rights offerings and private equity placements. Journal of
Financial Economics, 78, pp. 375–407.
Cruz, C., Gomez-Mejia, L.R. and Becerra, M. (2010). Per-
ceptions of benevolence and the design of agency
© 2014 British Academy of Management and John Wiley & Sons Ltd.
J. Pindado and I. Requejo
contracts: CEO–TMT relationships in family firms.
Academy of Management Journal, 53, pp. 69–89.
Cruz, C., Justo, R. and de Castro, J.O. (2012). Does family
employment enhance MSEs performance? Integrating
socioemotional wealth and family embeddedness per-
spectives. Journal of Business Venturing, 27, pp. 62–76.
Cucculelli, M. and Marchionne, F. (2012). Market opportu-
nities and owner identity. Are family firms different?
Journal of Corporate Finance, 18, pp. 476–495.
Cucculelli, M. and Micucci, G. (2008). Family succession
and firm performance: evidence from Italian family firms.
Journal of Corporate Finance, 14, pp. 17–31.
Daily, C.M., Dalton, D.R. and Cannella, A.A. Jr (2003).
Corporate governance: decades of dialogue and data.
Academy of Management Review, 28, pp. 371–382.
Dawson, A. (2011). Private equity investment decisions in
family firms: the role of human resources and agency
costs. Journal of Business Venturing, 26, pp. 189–199.
De Massis, A., Chua, J.H. and Chrisman, J.J. (2008). Factors
preventing intra-family succession. Family Business
Review, 21, pp. 183–199.
DeAngelo, H. and DeAngelo, L. (2000). Controlling stock-
holders and the disciplinary role of corporate payout
policy: a study of the Times Mirror Company. Journal of
Financial Economics, 56, pp. 153–207.
Debicki, B.J., Matherne, III, C.F., Kellermanns, F.W. and
Chrisman, J.J. (2009). Family business research in the new
millennium: an overview of the who, the where, the what,
and the why. Family Business Review, 22, pp. 151–166.
Delgado-García, J.B., de Quevedo-Puente, E. and
Fuente-Sabaté, J.M. (2010). The impact of ownership
structure on corporate reputation: evidence from Spain.
Corporate Governance: An International Review, 18,
pp. 540–556.
Demirag, I. and Serter, M. (2003). Ownership patterns and
control in Turkish listed companies. Corporate Govern-
ance: An International Review, 11, pp. 40–51.
Denis, D.J., Denis, D.K. and Sarin, A. (1997). Ownership
structure and top executive turnover. Journal of Financial
Economics, 45, pp. 193–221.
Denis, D.K. and McConnell, J.J. (2003). International cor-
porate governance. Journal of Financial and Quantitative
Analysis, 38, pp. 1–36.
Di Giuli, A., Caselli, S. and Gatti, S. (2011). Are small
family firms financially sophisticated? Journal of Banking
and Finance, 35, pp. 2931–2944.
Dittmar, A., Mahrt-Smith, J. and Servaes, H. (2003). Inter-
national corporate governance and corporate cash hold-
ings. Journal of Financial and Quantitative Analysis, 38,
pp. 111–133.
Douma, S., George, R. and Kabir, R. (2006). Foreign and
domestic ownership, business groups, and firm perfor-
mance: evidence from a large emerging market. Strategic
Management Journal, 27, pp. 637–657.
Dyer Jr, W.G. and Sánchez, M. (1998). Current state of
family business theory and practice as reflected in Family
Family Business and Corporate Governance
Business Review 1988–1997. Family Business Review, 11,
pp. 287–295.
Eberhard, M. and Craig, J. (2013). The evolving role of
organisational and personal networks in international
market venturing. Journal of World Business, 48, pp. 385–
397.
Eddleston, K.A. and Kellermanns, F.W. (2007). Destructive
and productive family relationships: a stewardship theory
perspective. Journal of Business Venturing, 22, pp. 545–
565.
Eddleston, K.A., Kellermanns, F.W. and Sarathy, R. (2008).
Resource configuration in family firms: linking resources,
strategic planning and technological opportunities to per-
formance. Journal of Management Studies, 45, pp. 26–50.
Eddleston, K.A., Kellermanns, F.W. and Zellweger, T.M.
(2012). Exploring the entrepreneurial behavior of family
firms: does the stewardship perspective explain differ-
ences? Entrepreneurship Theory and Practice, 36,
pp. 347–367.
Ellul, A., Pagano, M. and Panunzi, F. (2010). Inheritance law
and investment in family firms. American Economic
Review, 100, pp. 2414–2450.
Enriques, L. and Volpin, P. (2007). Corporate governance
reforms in continental Europe. Journal of Economic Per-
spectives, 21, pp. 117–140.
Espenlaub, S., Khurshed, A. and Sitthipongpanich, T.
(2012). Bank connections, corporate investment and
crisis. Journal of Banking and Finance, 36, pp. 1336–
1353.
Evans, D.S. and Leighton, L.S. (1989). Some empirical
aspects of entrepreneurship. American Economic Review,
79, pp. 519–535.
Faccio, M. (2006). Politically connected firms. American
Economic Review, 96, pp. 369–386.
Faccio, M. and Lang, L.H.P. (2002). The ultimate ownership
of Western European corporations. Journal of Financial
Economics, 65, pp. 365–395.
Faccio, M. and Parsley, D.C. (2009). Sudden deaths: taking
stock of geographic ties. Journal of Financial and Quan-
titative Analysis, 44, pp. 683–718.
Faccio, M., Lang, L.H.P. and Young, L. (2001). Dividends
and expropriation. American Economic Review, 91, pp.
54–78.
Faccio, M., Marchica, M.-T. and Mura, R. (2011). Large
shareholder diversification and corporate risk-taking.
Review of Financial Studies, 24, pp. 3601–3641.
Fahlenbrach, R. (2009). Founder-CEOs, investment deci-
sions, and stock market performance. Journal of Finan-
cial and Quantitative Analysis, 44, pp. 439–466.
Fan, J.P.H., Wei, K.C.J. and Xu, X. (2011). Corporate finance
and governance in emerging markets: a selective review
and an agenda for future research. Journal of Corporate
Finance, 17, pp. 207–214.
Fernández, C. and Arrondo, R. (2005). Alternative internal
controls as substitutes of the board of directors. Corporate
Governance: An International Review, 13, pp. 856–866.
© 2014 British Academy of Management and John Wiley & Sons Ltd.
23
Fernández, Z. and Nieto, M.J. (2006). Impact of ownership
on the international involvement of SMEs. Journal of
International Business Studies, 37, pp. 340–351.
Fiegener, M.K. (2010). Locus of ownership and family
involvement in small private firms. Journal of Manage-
ment Studies, 47, pp. 296–321.
Filatotchev, I., Strange, R., Piesse, J. and Lien, Y.-C. (2007).
FDI by firms from newly industrialised economies in
emerging markets: corporate governance, entry mode and
location. Journal of International Business Studies, 38,
pp. 556–572.
Fogel, K. (2006). Oligarchic family control, social economic
outcomes, and the quality of government. Journal of
International Business Studies, 37, pp. 603–622.
Franks, J.R. and Mayer, C. (2001). Ownership and control of
German corporations. Review of Financial Studies, 14,
pp. 943–977.
Franks, J.R., Mayer, C., Volpin, P. and Wagner, H.F. (2012).
The life cycle of family ownership: international evi-
dence. Review of Financial Studies, 25, pp. 1675–1712.
Frydman, C. and Saks, R.E. (2010). Executive compensa-
tion: a new view from a long-term perspective, 1936–
2005. Review of Financial Studies, 23, pp. 2099–2138.
Furrer, O., Thomas, H. and Goussevskaia, A. (2008). The
structure and evolution of the strategic management field:
a content analysis of 26 years of strategic management
research. International Journal of Management Reviews,
10, pp. 1–23.
Gabrielsson, J. (2007). Correlates of board empowerment in
small companies. Entrepreneurship Theory and Practice,
31, pp. 687–711.
Gadhoum, Y., Lang, L.H.P. and Young, L. (2005). Who
controls U.S. European Financial Management, 11, pp.
339–363.
Gao, N. and Jain, B.A. (2011). Founder CEO management
and the long-run investment performance of IPO firms.
Journal of Banking and Finance, 35, pp. 1669–1682.
Gedajlovic, E. and Carney, M. (2010). Markets, hierarchies,
and families: toward a transaction cost theory of the
family firm. Entrepreneurship Theory and Practice, 34,
pp. 1145–1172.
Gedajlovic, E. and Shapiro, D. (1998). Management and
ownership effects: evidence from five countries. Strategic
Management Journal, 19, pp. 533–553.
Gedajlovic, E., Carney, M., Chrisman, J.J. and Kellermanns,
F.W. (2012). The adolescence of family firm research:
taking stock and planning for the future. Journal of Man-
agement, 38, pp. 1010–1037.
Geranio, M. and Zanotti, G. (2012). Equity markets do not
fit all: an analysis of public-to-private deals in continental
Europe. European Financial Management, 18, pp. 867–
895.
Giambatista, R.C., Rowe, W.G. and Riaz, S. (2005). Nothing
succeeds like succession: a critical review of leader suc-
cession literature since 1994. The Leadership Quarterly,
16, pp. 963–991.
24
Giannetti, M. and Simonov, A. (2006). Which investors fear
expropriation? Evidence from investors’ portfolio
choices. Journal of Finance, 61, pp. 1507–1547.
Gibson, M.S. (2003). Is corporate governance ineffective in
emerging markets? Journal of Financial and Quantitative
Analysis, 38, pp. 231–250.
Gomez-Mejia, L.R., Cruz, C., Berrone, P. and De Castro, J.
(2011). The bind that ties: socioemotional wealth preser-
vation in family firms. Academy of Management Annals,
5, pp. 653–707.
Gomez-Mejia, L.R., Haynes, K.T., Nuñez-Nickel, M.,
Jacobson, K.J.L. and Moyano-Fuentes, J. (2007).
Socioemotional wealth and business risks in family-
controlled firms: evidence from Spanish olive oil mills.
Administrative Science Quarterly, 52, pp. 106–137.
Gomez-Mejia, L.R., Larraza-Kintana, M. and Makri, M.
(2003). The determinants of executive compensation
in family-controlled public corporations. Academy of
Management Journal, 46, pp. 226–237.
Gomez-Mejia, L.R., Makri, M. and Larraza-Kintana, M.
(2010). Diversification decisions in family-controlled
firms. Journal of Management Studies, 47, pp. 223–252.
Gomez-Mejia, L.R., Nuñez-Nickel, M. and Gutierrez, I.
(2001). The role of family ties in agency contracts.
Academy of Management Journal, 44, pp. 81–95.
Gompers, P.A., Ishii, J. and Metrick, A. (2010). Extreme
governance: an analysis of dual-class firms in the United
States. Review of Financial Studies, 23, pp. 1052–1088.
Gopalan, R. and Jayaraman, S. (2012). Private control ben-
efits and earnings management: evidence from insider
controlled firms. Journal of Accounting Research, 50,
pp. 117–157.
Greenwood, R., Díaz, A.M., Li, S.X. and Lorente, J.C.
(2010). The multiplicity of institutional logics and the
heterogeneity of organizational responses. Organization
Science, 21, pp. 521–539.
Gugler, K. (2003). Corporate governance, dividend payout
policy, and the interrelation between dividends, R&D, and
capital investment. Journal of Banking and Finance, 27,
pp. 1297–1321.
Hall, A. and Nordqvist, M. (2008). Professional manage-
ment in family businesses: toward an extended under-
standing. Family Business Review, 21, pp. 51–69.
Hamelin, A. (2011). Small business groups enhance perfor-
mance and promote stability, not expropriation. Evidence
from French SMEs. Journal of Banking and Finance, 35,
pp. 613–626.
Handler, W.C. (1994). Succession in family business:
a review of the research. Family Business Review, 7,
pp. 133–157.
Hauser, S. and Lauterbach, B. (2004). The value of voting
rights to majority shareholders: evidence from dual-class
stock unifications. Review of Financial Studies, 17,
pp. 1167–1184.
Haw, I.-M., Ho, S.S.M., Hu, B. and Wu, D. (2010). Concen-
trated control, institutions, and banking sector: an
© 2014 British Academy of Management and John Wiley & Sons Ltd.
J. Pindado and I. Requejo
international study. Journal of Banking and Finance, 34,
pp. 485–497.
He, L. (2008). Do founders matter? A study of executive
compensation, governance structure and firm perfor-
mance. Journal of Business Venturing, 23, pp. 257–
279.
Heck, R.K.Z., Hoy, F., Poutziouris, P.Z. and Steier, L.P.
(2008). Emerging paths of family entrepreneurship
research. Journal of Small Business Management, 46,
pp. 317–330.
Herrero, I. (2011). Agency costs, family ties, and firm effi-
ciency. Journal of Management, 37, pp. 887–904.
Hillier, D. and McColgan, P. (2009). Firm performance and
managerial succession in family managed firms. Journal
of Business, Finance and Accounting, 36, pp. 461–484.
Holderness, C.G. (2009). The myth of diffuse ownership
in the United States. Review of Financial Studies, 22,
pp. 1377–1408.
Hollander, B.S. and Elman, N.S. (1988). Family-owned
businesses: an emerging field of inquiry. Family Business
Review, 1, pp. 145–164.
Holmen, M., Knopf, J.D. and Peterson, S. (2007). Trading-
off corporate control and personal diversification through
capital structure and merger activity. Journal of Business,
Finance and Accounting, 34, pp. 1470–1495.
Howorth, C., Westhead, P. and Wright, M. (2004). Buyouts,
information asymmetry and the family management
dyad. Journal of Business Venturing, 19, pp. 509–
534.
Jara-Bertin, M., López-Iturriaga, F.J. and López-de-
Foronda, Ó. (2008). The contest to the control in Euro-
pean family firms: how other shareholders affect firm
value. Corporate Governance: An International Review,
16, pp. 146–159.
Jensen, M.C. and Meckling, W. (1976). Theory of the firm:
managerial behavior, agency costs, and ownership struc-
ture. Journal of Financial Economics, 3, pp. 305–360.
Jiraporn, P., Liu, Y. and Kim, Y.S. (2012). How do powerful
CEOs affect analyst coverage? European Financial Man-
agement, doi: 10.1111/j.1468-036X.2012.00655.x.
Jog, V., Zhu, P.C. and Dutta, S. (2010). Impact of restricted
voting share structure on firm value and performance.
Corporate Governance: An International Review, 18, pp.
415–437.
Jones, C.D., Makri, M. and Gomez-Mejia, L.R. (2008).
Affiliate directors and perceived risk bearing in publicly
traded, family-controlled firms: the case of diversification.
Entrepreneurship Theory and Practice, 32, pp. 1007–
1026.
Kalcheva, I. and Lins, K.V. (2007). International evidence on
cash holdings and expected managerial agency problems.
Review of Financial Studies, 20, pp. 1087–1112.
Karra, N., Tracey, P. and Phillips, N. (2006). Altruism and
agency in the family firm: exploring the role of family,
kinship, and ethnicity. Entrepreneurship Theory and
Practice, 30, pp. 861–877.
Family Business and Corporate Governance
Kellermanns, F.W. and Eddleston, K.A. (2006). Corporate
entrepreneurship in family firms: a family perspective.
Entrepreneurship Theory and Practice, 30, pp. 809–
830.
Khanna, T. and Palepu, K. (2000). Is group affiliation
profitable in emerging markets? An analysis of diversified
Indian business groups. Journal of Finance, 55, pp. 867–
891.
Khanna, T. and Yafeh, Y. (2007). Business groups in emerg-
ing markets: paragons or parasites? Journal of Economic
Literature, 45, pp. 331–372.
Kim, H., Kim, H. and Lee, P.M. (2008). Ownership structure
and the relationship between financial slack and R&D
investments: evidence from Korean firms. Organization
Science, 19, pp. 404–418.
King, M.R. and Santor, E. (2008). Family values: ownership
structure, performance, and capital structure of Canadian
firms. Journal of Banking and Finance, 32, pp. 2423–
2432.
Klasa, S. (2007). Why do controlling families of public
firms sell their remaining ownership stake? Journal
of Financial and Quantitative Analysis, 42, pp. 339–
367.
Klein, P., Shapiro, D. and Young, J. (2005b). Corporate gov-
ernance, family ownership and firm value: the Canadian
evidence. Corporate Governance: An International
Review, 13, pp. 769–784.
Klein, S.B. (2000). Family businesses in Germany: signifi-
cance and structure. Family Business Review, 13, pp. 157–
182.
Klein, S.B., Astrachan, J.H. and Smyrnios, K.X. (2005a).
The F-PEC scale of family influence: construction, vali-
dation, and further implication for theory. Entrepreneur-
ship Theory and Practice, 29, pp. 321–339.
Kole, S.R. (1997). The complexity of compensation con-
tracts. Journal of Financial Economics, 43, pp. 79–104.
Konijn, S.J.J., Kräussl, R. and Lucas, A. (2011). Blockholder
dispersion and firm value. Journal of Corporate Finance,
17, pp. 1330–1339.
Kowalewski, O., Talavera, O. and Stetsyuk, I. (2010). Influ-
ence of family involvement in management and owner-
ship on firm performance: evidence from Poland. Family
Business Review, 23, pp. 45–59.
Kuo, Y.-P. and Hung, J.-H. (2012). Family control and
investment–cash flow sensitivity: moderating effects of
excess control rights and board independence. Corporate
Governance: An International Review, 20, pp. 253–266.
La Porta, R., Lopez-de-Silanes, F. and Shleifer, A. (1999).
Corporate ownership around the world. Journal of
Finance, 54, pp. 471–517.
La Porta, R., Lopez-de-Silanes, F., Shleifer, A. and Vishny,
R.W. (1997). Legal determinants of external finance.
Journal of Finance, 52, pp. 1131–1150.
La Porta, R., Lopez-de-Silanes, F., Shleifer, A. and Vishny,
R.W. (1998). Law and finance. Journal of Political
Economy, 106, pp. 1113–1155.
© 2014 British Academy of Management and John Wiley & Sons Ltd.
25
La Porta, R., Lopez-de-Silanes, F., Shleifer, A. and Vishny,
R.W. (2000). Agency problems and dividend policies
around the world. Journal of Finance, 55, pp. 1–33.
La Porta, R., Lopez-de-Silanes, F., Shleifer, A. and Vishny,
R.W. (2002). Investor protection and corporate valuation.
Journal of Finance, 57, pp. 1147–1170.
Laeven, L. and Levine, R. (2008). Complex ownership
structures and corporate valuations. Review of Financial
Studies, 21, pp. 579–604.
Lambrecht, J. (2005). Multigenerational transition in family
businesses: a new explanatory model. Family Business
Review, 18, pp. 267–282.
Le Breton-Miller, I. and Miller, D. (2006). Why do some
family businesses out-compete? Governance, long-term
orientations, and sustainable capability. Entrepreneurship
Theory and Practice, 30, pp. 731–746.
Le Breton-Miller, I. and Miller, D. (2009). Agency vs. stew-
ardship in public family firms: a social embeddedness
reconciliation. Entrepreneurship Theory and Practice, 33,
pp. 1169–1191.
Le Breton-Miller, I. and Miller, D. (2011). Commentary:
family firms and the advantage of multitemporality.
Entrepreneurship Theory and Practice, 35, pp. 1171–
1177.
Le Breton-Miller, I., Miller, D. and Lester, R.H. (2011).
Stewardship or agency? A social embeddedness
reconciliation of conduct and performance in public
family businesses. Organization Science, 22, pp. 704–
721.
Lee, K.S., Lim, G.H. and Lim, W.S. (2003). Family business
succession: appropriation risk and choice of successor.
Academy of Management Review, 28, pp. 657–666.
Lester, R.H. and Cannella, A.A. Jr (2006). Interor-
ganizational familiness: how family firms use interlock-
ing directorates to build community-level social capital.
Entrepreneurship Theory and Practice, 30, pp. 755–775.
Leuz, C., Lins, K.V. and Warnock, F.E. (2009). Do foreign-
ers invest less in poorly governed firms? Review of Finan-
cial Studies, 22, pp. 3245–3285.
Levy, M. (2009). Control in pyramidal structures. Corporate
Governance: An International Review, 17, pp. 77–89.
Li, F. and Srinivasan, S. (2011). Corporate governance when
founders are directors. Journal of Financial Economics,
102, pp. 454–469.
Lim, E.N.K., Lubatkin, M.H. and Wiseman, R.M. (2010).
A family firm variant of the behavioral agency theory.
Strategic Entrepreneurship Journal, 4, pp. 197–211.
Lin, C., Ma, Y., Malatesta, P. and Xuan, Y. (2011). Owner-
ship structure and the cost of corporate borrowing.
Journal of Financial Economics, 100, pp. 1–23.
Lin, C.-P. and Chuang, C.-M. (2011). Principal–principal
conflicts and IPO pricing in an emerging economy.
Corporate Governance: An International Review, 19,
pp. 585–600.
Lin, S.-H. and Hu, S.-Y. (2007). A family member or pro-
fessional management? The choice of a CEO and its
26
impact on performance. Corporate Governance: An Inter-
national Review, 15, pp. 1348–1362.
Ling, Y. and Kellermanns, F.W. (2010). The effects of family
firm specific sources of TMT diversity: the moderating
role of information exchange frequency. Journal of Man-
agement Studies, 47, pp. 322–344.
Lins, K.V. (2003). Equity ownership and firm value in
emerging markets. Journal of Financial and Quantitative
Analysis, 38, pp. 159–184.
Lins, K.V., Volpin, P. and Wagner, H.F. (2013). Does family
control matter? International evidence from the 2008–
2009 financial crisis. Review of Financial Studies, 26,
pp. 2583–2619.
Litz, R.A., Pearson, A.W. and Litchfield, S. (2012). Charting
the future of family business research: perspectives from
the field. Family Business Review, 25, pp. 16–32.
Loderer, C. and Waelchli, U. (2010). Protecting minority
shareholders: listed versus unlisted firms. Financial Man-
agement, 39, pp. 33–57.
López-de-Foronda, Ó., López-Iturriaga, F.J. and
Santamaría-Mariscal, M. (2007). Ownership structure,
sharing of control, and legal framework: international evi-
dence. Corporate Governance: An International Review,
15, pp. 1130–1143.
Lubatkin, M.H., Ling, Y. and Schulze, W.S. (2007). An
organizational justice-based view of self-control and
agency costs in family firms. Journal of Management
Studies, 44, pp. 955–971.
Lubatkin, M.H., Schulze, W.S., Ling, Y. and Dino, R.N.
(2005). The effects of parental altruism on the governance
of family-managed firms. Journal of Organizational
Behavior, 26, pp. 313–330.
Lumpkin, G.T. and Brigham, K.H. (2011). Long-term
orientation and intertemporal choice in family firms.
Entrepreneurship Theory and Practice, 35, pp. 1149–
1169.
Luo, X.R. and Chung, C.-N. (2005). Keeping it all in the
family: the role of particularistic relationships in business
group performance during institutional transition. Admin-
istrative Science Quarterly, 50, pp. 404–439.
Luo, X.R. and Chung, C.-N. (2013). Filling or abusing the
institutional void? Ownership and management control of
public family businesses in an emerging market. Organi-
zation Science, 24, pp. 591–613.
Luo, X.R., Chung, C.-N. and Sobczak, M. (2009).
How do corporate governance model differences affect
foreign direct investment in emerging economies?
Journal of International Business Studies, 40, pp. 444–
467.
Margaritis, D. and Psillaki, M. (2010). Capital structure,
equity ownership and firm performance. Journal of
Banking and Finance, 34, pp. 621–632.
Martí, J., Menéndez-Requejo, S. and Rottke, O.M. (2013).
The impact of venture capital on family businesses:
evidence from Spain. Journal of World Business, 48,
pp. 420–430.
© 2014 British Academy of Management and John Wiley & Sons Ltd.
J. Pindado and I. Requejo
Martinez, R. (2009). Research on women in family firms:
current status and future directions. Family Business
Review, 22, pp. 53–64.
Masulis, R.W., Pham, P.K. and Zein, J. (2011). Family busi-
ness groups around the world: financing advantages,
control motivations, and organizational choices. Review
of Financial Studies, 24, pp. 3556–3600.
Masulis, R.W., Wang, C. and Xie, F. (2009). Agency prob-
lems at dual-class companies. Journal of Finance, 64,
pp. 1697–1727.
Maury, B. (2006). Family ownership and firm performance:
empirical evidence from Western European corporations.
Journal of Corporate Finance, 12, pp. 321–341.
Maury, B. and Pajuste, A. (2005). Multiple large sharehold-
ers and firm value. Journal of Banking and Finance, 29,
pp. 1813–1834.
Mayer, C. (2008). Trust in financial markets. European
Financial Management, 14, pp. 617–632.
McConaughy, D.L. (1999). Is the cost of capital different for
family firms? Family Business Review, 12, pp. 353–360.
McConaughy, D.L. (2000). Family CEOs vs. nonfamily
CEOs in the family-controlled firm: an examination of the
level and sensitivity of pay to performance. Family Busi-
ness Review, 13, pp. 121–131.
Mehrotra, V., Morck, R., Shim, J. and Wiwattanakantang, Y.
(2011). Must love kill the family firm? Some exploratory
evidence. Entrepreneurship Theory and Practice, 35, pp.
1121–1148.
Michiels, A., Voordeckers, W., Lybaert, N. and Steijvers, T.
(2013). CEO compensation in private family firms: pay-
for-performance and the moderating role of ownership
and management. Family Business Review, 26, pp. 140–
160.
Miguel, A., Pindado, J. and de la Torre, C. (2004). Owner-
ship structure and firm value: new evidence from Spain.
Strategic Management Journal, 25, pp. 1199–1207.
Miguel, A., Pindado, J. and de la Torre, C. (2005). How do
entrenchment and expropriation phenomena affect control
mechanisms? Corporate Governance: An International
Review, 13, pp. 505–516.
Miller, D. (2011). Miller (1983) revisited: a reflection on EO
research and some suggestions for the future. Entrepre-
neurship Theory and Practice, 35, pp. 873–894.
Miller, D. and Le Breton-Miller, I. (2006). Family govern-
ance and firm performance: agency, stewardship, and
capabilities. Family Business Review, 19, pp. 73–87.
Miller, D. and Le Breton-Miller, I. (2011). Governance,
social identity, and entrepreneurial orientation in closely
held public companies. Entrepreneurship Theory and
Practice, 35, pp. 1051–1076.
Miller, D., Le Breton-Miller, I. and Lester, R.H. (2010).
Family ownership and acquisition behavior in publicly-
traded companies. Strategic Management Journal, 31,
pp. 201–223.
Miller, D., Le Breton-Miller, I. and Lester, R.H. (2011).
Family and lone founder ownership and strategic
Family Business and Corporate Governance
behaviour: social context, identity, and institutional
logics. Journal of Management Studies, 48, pp. 1–25.
Miller, D., Le Breton-Miller, I., Lester, R.H. and Cannella,
A.A. (2007). Are family firms really superior performers?
Journal of Corporate Finance, 13, pp. 829–858.
Miller, D., Le Breton-Miller, I. and Scholnick, B. (2008).
Stewardship vs. stagnation: an empirical comparison of
small family and non-family businesses. Journal of Man-
agement Studies, 45, pp. 51–78.
Miller, D., Lee, J., Chang, S. and Le Breton-Miller, I. (2009).
Filling the institutional void: the social behaviour and
performance of family vs. non-family technology firms in
emerging markets. Journal of International Business
Studies, 40, pp. 802–817.
Miller, D., Steier, L. and Le Breton-Miller, I. (2003). Lost in
time: intergenerational succession, change, and failure in
family business. Journal of Business Venturing, 18,
pp. 513–531.
Minichilli, A., Corbetta, G. and MacMillan, I.C. (2010). Top
management teams in family-controlled companies:
‘familiness’, ‘faultlines’, and their impact on financial
performance. Journal of Management Studies, 47,
pp. 205–222.
Mishra, D.R. (2011). Multiple large shareholders and cor-
porate risk taking: evidence from East Asia. Corporate
Governance: An International Review, 19, pp. 507–528.
Mitchell, J.R., Hart, T.A., Valcea, S. and Townsend, D.M.
(2009). Becoming the boss: discretion and postsuccession
success in family firms. Entrepreneurship Theory and
Practice, 33, pp. 1201–1218.
Moores, K. (2009). Paradigms and theory building in the
domain of business families. Family Business Review, 22,
pp. 167–180.
Morck, R. and Yeung, B. (2003). Agency problems in large
family business groups. Entrepreneurship Theory and
Practice, 27, pp. 367–382.
Morck, R. and Yeung, B. (2004). Family control and
the rent-seeking society. Entrepreneurship Theory and
Practice, 28, pp. 391–409.
Morck, R., Shleifer, A. and Vishny, R.W. (1988). Manage-
ment ownership and market valuation: an empirical analy-
sis. Journal of Financial Economics, 20, pp. 293–315.
Morck, R., Wolfenzon, D. and Yeung, B. (2005). Corpo-
rate governance, economic entrenchment, and growth.
Journal of Economic Literature, 43, pp. 655–720.
Morck, R., Yavuz, M.D. and Yeung, B. (2011). Banking
system control, capital allocation, and economy perfor-
mance. Journal of Financial Economics, 100, pp. 264–
283.
Morgado, A. and Pindado, J. (2003). The underinvestment
and overinvestment hypotheses: an analysis using panel
data. European Financial Management, 9, pp. 163–177.
Mroczkowski, N.A. and Tanewski, G. (2007). Delineating
publicly listed family and nonfamily controlled firms: an
approach for capital market research in Australia. Journal
of Small Business Management, 45, pp. 320–332.
© 2014 British Academy of Management and John Wiley & Sons Ltd.
27
Munari, F., Oriani, R. and Sobrero, M. (2010). The effects of
owner identity and external governance systems on R&D
investments: a study of Western European firms. Research
Policy, 39, pp. 1093–1104.
Muñoz-Bullón, F. and Sánchez-Bueno, M.J. (2012). Do
family ties shape the performance consequences of diver-
sification? Evidence from the European Union. Journal of
World Business, 47, pp. 469–477.
Nowland, J. (2008). The effect of national governance codes
on firm disclosure practices: evidence from analyst earn-
ings forecasts. Corporate Governance: An International
Review, 16, pp. 475–491.
O’Boyle, E.H. Jr, Pollack, J.M. and Rutherford, M.W.
(2012). Exploring the relation between family involve-
ment and firms’ financial performance: a meta-analysis of
main and moderator effects. Journal of Business Ventur-
ing, 27, pp. 1–18.
Orbay, H. and Yurtoglu, B.B. (2006). The impact of corpo-
rate governance structures on the corporate investment
performance in Turkey. Corporate Governance: An
International Review, 14, pp. 349–363.
Oswald, S.L., Muse, L.A. and Rutherford, M.W. (2009). The
influence of large stake family control on performance: is
it agency or entrenchment? Journal of Small Business
Management, 47, pp. 116–135.
Ozkan, A. and Ozkan, N. (2004). Corporate cash
holdings: an empirical investigation of UK compa-
nies. Journal of Banking and Finance, 28, pp. 2103–
2134.
Parrino, R. (1997). CEO turnover and outside succession. A
cross-sectional analysis. Journal of Financial Economics,
46, pp. 165–197.
Peng, M.W. and Jiang, Y. (2010). Institutions behind family
ownership and control in large firms. Journal of Manage-
ment Studies, 47, pp. 253–273.
Perez-Gonzalez, F. (2006). Inherited control and firm
performance. American Economic Review, 96, pp. 1559–
1588.
Perrini, F., Rossi, G. and Rovetta, B. (2008). Does ownership
structure affect performance? Evidence from the Italian
market. Corporate Governance: An International Review,
16, pp. 312–325.
Pieper, T.M., Klein, S.B. and Jaskiewicz, P. (2008). The
impact of goal alignment on board existence and top
management team composition: evidence from family-
influenced businesses. Journal of Small Business
Management, 46, pp. 372–394.
Pindado, J. and de la Torre, C. (2006). The role of invest-
ment, financing, and dividend decisions in explaining cor-
porate ownership structure: empirical evidence from
Spain. European Financial Management, 12, pp. 661–
687.
Pindado, J., de Queiroz, V. and de la Torre, C. (2010). How
do firm characteristics influence the relationship between
R&D and firm value? Financial Management, 39,
pp. 757–782.
28
Pindado, J., Requejo, I. and de la Torre, C. (2011). Family
control and investment–cash flow sensitivity: empirical
evidence from the Euro zone. Journal of Corporate
Finance, 17, pp. 1389–1409.
Pindado, J., Requejo, I. and de la Torre, C. (2012). Do family
firms use dividend policy as a governance mechanism?
Evidence from the Euro zone. Corporate Governance: An
International Review, 20, pp. 413–431.
Prencipe, A., Bar-Yosef, S., Mazzola, P. and Pozza, L.
(2011). Income smoothing in family-controlled compa-
nies: evidence from Italy. Corporate Governance: An
International Review, 19, pp. 529–546.
Prencipe, A., Markarian, G. and Pozza, L. (2008). Earnings
management in family firms: evidence from R&D cost
capitalization in Italy. Family Business Review, 21, pp.
71–88.
Purkayastha, S., Manolova, T.S. and Edelman, L.F. (2012).
Diversification and performance in developed and emerg-
ing market contexts: a review of the literature. Interna-
tional Journal of Management Reviews, 14, pp. 18–38.
Raelin, J.D. and Bondy, K. (2013). Putting the good back in
good corporate governance: the presence and problems of
double-layered agency theory. Corporate Governance: An
International Review, 21, pp. 420–435.
Randøy, T. and Goel, S. (2003). Ownership structure,
founder leadership, and performance in Norwegian
SMEs: implications for financing entrepreneurial oppor-
tunities. Journal of Business Venturing, 18, pp. 619–
637.
Romano, C.A., Tanewski, G.A. and Smyrnios, K.X. (2001).
Capital structure decision making: a model for family
business. Journal of Business Venturing, 16, pp. 285–310.
Roosenboom, P. and Schramade, W. (2006). The price of
power: valuing the controlling position of owner–
managers in French IPO firms. Journal of Corporate
Finance, 12, pp. 270–295.
Salvato, C. and Moores, K. (2010). Research on accounting
in family firms: past accomplishments and future chal-
lenges. Family Business Review, 23, pp. 193–215.
Sánchez-Ballesta, J.P. and García-Meca, E. (2007). A meta-
analytic vision of the effect of ownership structure on firm
performance. Corporate Governance: An International
Review, 15, pp. 879–892.
Sapp, S.G. (2008). The impact of corporate governance on
executive compensation. European Financial Manage-
ment, 14, pp. 710–746.
Schulze, W.S. and Gedajlovic, E.R. (2010). Whither family
business? Journal of Management Studies, 47, pp. 191–
204.
Schulze, W.S., Lubatkin, M.H. and Dino, R.N. (2003a).
Toward a theory of agency and altruism in family firms.
Journal of Business Venturing, 18, pp. 473–490.
Schulze, W.S., Lubatkin, M.H. and Dino, R.N. (2003b).
Exploring the agency consequences of ownership disper-
sion among the directors of private family firms. Academy
of Management Journal, 46, pp. 179–194.
© 2014 British Academy of Management and John Wiley & Sons Ltd.
J. Pindado and I. Requejo
Schulze, W.S., Lubatkin, M.H., Dino, R.N. and Buchholtz,
A.K. (2001). Agency relationships in family firms: theory
and evidence. Organization Science, 12, pp. 99–116.
Sciascia, S., Mazzola, P., Astrachan, J.H. and Pieper, T.M.
(2013). Family involvement in the board of directors:
effects on sales internationalization. Journal of Small
Business Management, 51, pp. 83–99.
Setia-Atmaja, L., Tanewski, G.A. and Skully, M. (2009).
The role of dividends, debt, and board structure in the
governance of family controlled firms. Journal of Busi-
ness, Finance and Accounting, 36, pp. 863–898.
Sharma, P. (2004). An overview of the field of family busi-
ness studies: current status and directions for the future.
Family Business Review, 17, pp. 1–36.
Sharma, P., Chrisman, J.J. and Chua, J.H. (1997). Strategic
management of the family business: past research and
future challenges. Family Business Review, 10, pp. 1–
35.
Sharma, P., Chrisman, J.J. and Gersick, K.E. (2012). 25 Years
of Family Business Review: reflections on the past and
perspectives for the future. Family Business Review, 25,
pp. 5–15.
Shim, J. and Okamuro, H. (2011). Does ownership matter in
mergers? A comparative study of the causes and conse-
quences of mergers by family and non-family firms.
Journal of Banking and Finance, 35, pp. 193–203.
Shleifer, A. and Vishny, R.W. (1997). A survey of corporate
governance. Journal of Finance, 52, pp. 737–783.
Shyu, Y.W. and Lee, C.I. (2009). Excess control rights and
debt maturity structure in family-controlled firms. Corpo-
rate Governance: An International Review, 17, pp. 611–
628.
Siebels, J.-F. and zu Knyphausen-Aufseß, D. (2012). A
review of theory in family business research: the impli-
cations for corporate governance. International Journal
of Management Reviews, 14, pp. 280–304.
Siedlok, F. and Hibbert, P. (2013). The organization of
interdisciplinary research: modes, drivers and barriers.
International Journal of Management Reviews, 16,
pp. 194–210.
Sieger, P., Zellweger, T., Nason, R.S. and Clinton, E. (2011).
Portfolio entrepreneurship in family firms: a resource-
based perspective. Strategic Entrepreneurship Journal, 5,
pp. 327–351.
Singal, M. and Singal, V. (2011). Concentrated ownership
and firm performance: does family control matter? Stra-
tegic Entrepreneurship Journal, 5, pp. 373–396.
Sirmon, D.G., Arregle, J.-L., Hitt, M.A. and Webb, J.W.
(2008). The role of family influence in firms’ strategic
responses to threat of imitation. Entrepreneurship Theory
and Practice, 32, pp. 979–998.
Smith, B.F. and Amoako-Adu, B. (1999). Management suc-
cession and financial performance of family-controlled
firms. Journal of Corporate Finance, 5, pp. 341–368.
Stewart, A. and Hitt, M.A. (2012). Why can’t a family
business be more like a nonfamily business? Modes of
Family Business and Corporate Governance
professionalization in family firms. Family Business
Review, 25, pp. 58–86.
Stockmans, A., Lybaert, N. and Voordeckers, W. (2010).
Socioemotional wealth and earnings management
in private family firms. Family Business Review, 23,
pp. 280–294.
Stulz, R.M. (2005). The limits of financial globalization.
Journal of Finance, 60, pp. 1595–1638.
Thomsen, S. and Pedersen, T. (2000). Ownership structure
and economic performance in the largest European com-
panies. Strategic Management Journal, 21, pp. 689–705.
Thomsen, S., Pedersen, T. and Kvist, H.K. (2006).
Blockholder ownership: effects on firm value in market
and control based governance systems. Journal of
Corporate Finance, 12, pp. 246–269.
Van den Berghe, L.A.A. and Carchon, S. (2002). Corporate
governance practices in Flemish family businesses.
Corporate Governance: An International Review, 10,
pp. 225–245.
Van den Berghe, L.A.A. and Carchon, S. (2003). Agency
relations within the family business system: an explora-
tory approach. Corporate Governance: An International
Review, 11, pp. 171–179.
Van Den Heuvel, J., Van Gils, A. and Voordeckers, W.
(2006). Board roles in small and medium-sized family
businesses: performance and importance. Corporate
Governance: An International Review, 14, pp. 467–485.
Villalonga, B. and Amit, R. (2006). How do family owner-
ship, control, and management affect firm value? Journal
of Financial Economics, 80, pp. 385–418.
Villalonga, B. and Amit, R. (2009). How are U.S. family
firms controlled? Review of Financial Studies, 22,
pp. 3047–3092.
Villalonga, B. and Amit, R. (2010). Family control of firms
and industries. Financial Management, 39, pp. 863–
904.
Volpin, P.F. (2002). Governance with poor investor protec-
tion: evidence from top executive turnover in Italy.
Journal of Financial Economics, 64, pp. 61–90.
Voordeckers, W., Van Gils, A. and Van den Heuvel, J.
(2007). Board composition in small and medium-sized
family firms. Journal of Small Business Management, 45,
pp. 137–156.
Wang, D. (2006). Founding family ownership and earnings
quality. Journal of Accounting Research, 44, pp. 619–656.
Wennberg, K., Wiklund, J., Hellerstedt, K. and Nordqvist,
M. (2011). Implications of intra-family and external own-
ership transfer of family firms: short-term and long-term
performance differences. Strategic Entrepreneurship
Journal, 5, pp. 352–372.
Westhead, P. and Howorth, C. (2006). Ownership and man-
agement issues associated with family firm performance
and company objectives. Family Business Review, 19,
pp. 301–316.
Wintoki, M.B., Linck, J.S. and Netter, J.M. (2012).
Endogeneity and the dynamics of internal corporate
© 2014 British Academy of Management and John Wiley & Sons Ltd.
29
governance. Journal of Financial Economics, 105, pp.
581–606.
Wiseman, R.M., Cuevas-Rodríguez, G. and Gomez-Mejia,
L.R. (2012). Towards a social theory of agency. Journal
of Management Studies, 49, pp. 202–222.
Wong, Y.-J., Chang, S.-C. and Chen, L.-Y. (2010). Does a
family-controlled firm perform better in corporate ventur-
ing? Corporate Governance: An International Review, 18,
pp. 175–192.
Wu, Z., Chua, J.H. and Chrisman, J.J. (2007). Effects of
family ownership and management on small business
equity financing. Journal of Business Venturing, 22,
pp. 875–895.
Xu, N., Xu, X. and Yuan, Q. (2013). Political connections,
financing friction, and corporate investment: evidence
from Chinese listed family firms. European Financial
Management, 19, pp. 675–702.
Yang, M.-L. (2010). The impact of controlling families and
family CEOs on earnings management. Family Business
Review, 23, pp. 266–279.
Yeh, Y.-H. (2005). Do controlling shareholders enhance cor-
porate value. Corporate Governance: An International
Review, 13, pp. 313–325.
Yeh, Y.-H. and Woidtke, T. (2005). Commitment or
entrenchment?: Controlling shareholders and board com-
position. Journal of Banking and Finance, 29, pp. 1857–
1885.
Yeh, Y.-H., Shu, P.-G. and Guo, R.-J. (2008). Ownership
structure and IPO valuation – Evidence from Taiwan.
Financial Management, 37, pp. 141–161.
Yoshikawa, T. and Rasheed, A.A. (2010). Family control
and ownership monitoring in family-controlled firms
in Japan. Journal of Management Studies, 47, pp. 274–
295.
Young, C.-S., Tsai, L.-C. and Hsieh, P.-G. (2008b). Volun-
tary appointment of independent directors in Taiwan:
motives and consequences. Journal of Business, Finance
and Accounting, 35, pp. 1103–1137.
Young, M.N., Peng, M.W., Ahlstrom, D., Bruton, G.D. and
Jiang, Y. (2008a). Corporate governance in emerging
economies: a review of the principal–principal perspec-
tive. Journal of Management Studies, 45, pp. 196–
220.
Yu, A., Lumpkin, G.T., Sorenson, R.L. and Brigham,
K.H. (2012). The landscape of family business out-
comes: a summary and numerical taxonomy of
dependent variables. Family Business Review, 25,
pp. 33–57.
Yu, X. and Zheng, Y. (2012). IPO underpricing to retain
family control under concentrated ownership: evidence
from Hong Kong. Journal of Business, Finance and
Accounting, 39, pp. 700–729.
Zahra, S.A. (2003). International expansion of U.S. manu-
facturing family businesses: the effect of ownership and
involvement. Journal of Business Venturing, 18, pp. 495–
512.
30 J. Pindado and I. Requejo

Zahra, S.A. (2010). Harvesting family firms’ organizational
social capital: a relational perspective. Journal of Man-
agement Studies, 47, pp. 345–366.
Zahra, S.A. and Sharma, P. (2004). Family business
research: a strategic reflection. Family Business Review,
17, pp. 331–346.
Zahra, S.A., Hayton, J.C., Neubaum, D.O., Dibrell, C. and
Craig, J. (2008). Culture of family commitment and stra-
tegic flexibility: the moderating effect of stewardship.
Entrepreneurship Theory and Practice, 32, pp. 1035–
1054.
Zellweger, T.M., Kellermanns, F.W., Chrisman, J.J. and
Chua, J.H. (2012). Family control and family firm valua-
tion by family CEOs: the importance of intentions
for transgenerational control. Organization Science, 23,
pp. 851–868.
Zhou, Y.M., Li, X. and Svejnar, J. (2011). Subsidiary
divestiture and acquisition in a financial crisis:
operational focus, financial constraints, and owner-
ship. Journal of Corporate Finance, 17, pp. 272–
287.

Appendix 1. Distribution of articles by type of study, theoretical framework and

type of firm analysed
Finance Management Total

No. of % of No. of % of No. of % of

articles category articles category articles total

Panel A: Classification of articles by type of study

Type of study
Review 6 3.8 34 17.3 40 11.3
Theoretical 4 2.5 28 14.2 32 9.0
Empirical 141 89.8 124 62.9 265 74.9
Mixeda 6 3.8 11 5.6 17 4.8
Total no. of articles 157 100.0 197 100.0 354 100.0
Panel B: Theoretical framework used in empirical family business research
Theoretical framework
Agency theory 108 69.7 87 45.1 195 56.0
Resource-based view 0 0.0 23 11.9 23 6.6
Institutional theory 9 5.8 13 6.7 22 6.3
Stewardship theory 2 1.3 20 10.4 22 6.3
Cultural perspectiveb 3 1.9 18 9.3 21 6.0
Behavioural theory 1 0.6 4 2.1 5 1.4
Stakeholder theory 0 0.0 5 2.6 5 1.4
Resource dependence 0 0.0 4 2.1 4 1.1
Transaction cost theory 2 1.3 1 0.5 3 0.9
Game theory 0 0.0 2 1.0 2 0.6
Others 30 19.4 16 8.3 46 13.2
Total 155 100.0 193 100.0 348 100.0
Multiple theories – Two 6 42 48
Multiple theories – Three 1 8 9
Total no. of articles 147 135 282
Panel C: Type of firm analysed in empirical family business research
Type of firm
Public 115 78.2 70 51.9 185 65.6
Private 9 6.1 51 37.8 60 21.3
Both 23 15.6 14 10.4 37 13.1
Total no. of articles 147 100.0 135 100.0 282 100.0

a
The mixed category contains articles that develop a theory and also contain empirical analyses.
b
The cultural perspective category includes, among others, articles that analyse the following phenomena: altruism, crony capitalism,
familiness, nepotism, social capital, socio-emotional wealth and trust.

© 2014 British Academy of Management and John Wiley & Sons Ltd.
Family Business and Corporate Governance 31

Appendix 2. Distribution of articles by family business definition and

performance measure
Finance Management Total

No. of % of No. of % of No. of % of

articles category articles category articles total

Panel A: Family business definitions used in empirical family business researcha

Family business definition
Largest shareholder or ultimate owner 74 66.7 60 48.8 134 57.3
Multiple family members 3 2.7 27 22.0 30 12.8
Owner or manager (incl. founder) 20 18.0 5 4.1 25 10.7
Management or board representation 9 8.1 9 7.3 18 7.7
Self-reported as family business 1 0.9 9 7.3 10 4.3
Others 4 3.6 13 10.6 17 7.3
Total no. of articles 111 100.0 123 100.0 234 100.0
Panel B: Performance measures used in empirical family business research
Performance measure
Market value 30 57.7 15 30.0 45 44.1
Profitability 14 26.9 12 24.0 26 25.5
Growth 5 9.6 8 16.0 13 12.7
Subjectiveb 0 0.0 13 26.0 13 12.7
Productivity 2 3.8 1 2.0 3 2.9
Efficiency 1 1.9 1 2.0 2 2.0
Total 52 100.0 50 100.0 102 100.0
Multiple measures – Two 12 4 16
Multiple measures – Three 1 3 4
Multiple measures – Four 1 0 1
Total no. of articles 35 40 75

a
In studies with several family business definitions, only the definition used for the main empirical analyses (and not the definitions
employed in robustness checks) is considered for classification purposes.
b
Subjective measures of performance are self-reported measures (using surveys) and in most cases are proxies for business growth and
profitability.

Appendix 3. Distribution of articles by governance mechanism analysed and

estimation method used
Finance Management Total

No. of % of No. of % of No. of % of

articles category articles category articles total

Panel A: Corporate governance mechanisms analysed in empirical family business researcha

Type of governance mechanism
Internal mechanisms: of which 261 79.3 265 93.0 526 85.7
Ownership concentration 120 36.5 125 43.9 245 39.9
Management position 37 11.2 44 15.4 81 13.2
Board of directors 22 6.7 28 9.8 50 8.1
Multiple large shareholders 19 5.8 14 4.9 33 5.4
Monitoring role of debt 20 6.1 9 3.2 29 4.7
Executive compensation 8 2.4 12 4.2 20 3.3
Transparency 11 3.3 7 2.5 18 2.9
Other stakeholders 11 3.3 2 0.7 13 2.1
Dividend payments 7 2.1 3 1.1 10 1.6
Others 6 1.8 21 7.4 27 4.4

© 2014 British Academy of Management and John Wiley & Sons Ltd.
32 J. Pindado and I. Requejo

Appendix 3. Continued
Finance Management Total

No. of % of No. of % of No. of % of

articles category articles category articles total

External mechanisms: of which 68 20.7 20 7.0 88 14.3

Legal system 32 9.7 10 3.5 42 6.8
Financial markets 17 5.2 6 2.1 23 3.7
M&A market 10 3.0 2 0.7 12 2.0
Product market 4 1.2 2 0.7 6 1.0
Labour market 5 1.5 0 0.0 5 0.8
Total internal and external 329 100.0 285 100.0 614 100.0
Panel B: Estimation methods used in empirical family business researchb
Estimation method
Ordinary least squares 41 38.0 54 52.4 95 45.0
Instrumental variables: of which 32 29.6 16 15.5 48 22.7
Heckman 10 9.3 6 5.8 16 7.6
2 stage least squares 22 20.4 10 9.7 32 15.2
Panel data methods: of which 29 26.9 29 28.2 58 27.5
Random effects 7 6.5 8 7.8 15 7.1
Fixed effects 6 5.6 6 5.8 12 5.7
GMM 10 9.3 10 9.7 20 9.5
Unspecified 6 5.6 5 4.9 11 5.2
Simultaneous equations model 6 5.6 4 3.9 10 4.7
Total no. of articles 108 100.0 103 100.0 211 100.0
Panel C: Discussion of endogeneity problem in empirical family business researchb
Endogeneity problem discussed
Yes 57 52.8 37 35.9 94 44.5
No 51 47.2 66 64.1 117 55.5
Total no. of articles 108 100.0 103 100.0 211 100.0

a
Studies can address more than one corporate governance mechanism of the same or different type.
b
The classification only considers empirical articles that use comparable regression methods; therefore, works that use the following
methodologies are not taken into consideration: descriptive research, analyses with non-linear models, and event studies.

Appendix 4. Distribution of articles by type of data source used and

geographical region analysed
Finance Management Total

No. of % of No. of % of No. of % of

articles category articles category articles total

Panel A: Types of data sources used in empirical family business research

Secondary data: of which 132 89.8 78 57.8 210 74.5
Databases 63 42.9 45 33.3 108 38.3
Hand-collected reports 5 3.4 3 2.2 8 2.8
Databases and reports 64 43.5 30 22.2 94 33.3
Primary data: of which 15 10.2 57 42.2 72 25.5
Survey 7 4.8 35 25.9 42 14.9
Survey and databases 1 0.7 20 14.8 21 7.4
Survey and reports 0 0.0 1 0.7 1 0.4
Survey, databases, and reports 7 4.8 1 0.7 8 2.8
Total no. of articles 147 100.0 135 100.0 282 100.0

© 2014 British Academy of Management and John Wiley & Sons Ltd.
Family Business and Corporate Governance 33

Appendix 4. Continued
Finance Management Total

No. of % of No. of % of No. of % of

articles category articles category articles total

Panel B: Number of countries analysed in empirical family business research

Single-country studies 98 66.7 111 82.2 209 74.1
Cross-country studies: of which 49 33.3 24 17.8 73 25.9
Interval [2,10) 9 6.1 12 8.9 21 7.4
Interval [10,20) 15 10.2 5 3.7 20 7.1
Interval [20,30) 10 6.8 3 2.2 13 4.6
Interval [30,40) 7 4.8 2 1.5 9 3.2
Interval [40, . . .) 8 5.4 2 1.5 10 3.5
Total no. of articles 147 100.0 135 100.0 282 100.0
Panel C: Geographical regions analysed in empirical family business research
Single-country studies: of which 98 66.7 111 82.2 209 74.1
North America 48 32.7 38 28.1 86 30.5
Eastern and Western Europe 28 19.0 44 32.6 72 25.5
Far East and Central Asia 20 13.6 24 17.8 44 15.6
Oceania 1 0.7 3 2.2 4 1.4
Africa and Middle East 1 0.7 1 0.7 2 0.7
Central and South America 0 0.0 1 0.7 1 0.4
Cross-country studies: of which 49 33.3 24 17.8 73 25.9
Eastern and Western Europe 20 13.6 10 7.4 30 10.6
Far East and Central Asia 6 4.1 6 4.4 12 4.3
Central and South America 0 0.0 1 0.7 1 0.4
International 23 15.6 7 5.2 30 10.6
Total no. of articles 147 100.0 135 100.0 282 100.0

© 2014 British Academy of Management and John Wiley & Sons Ltd.