50th Congress of the European Regional Science Association: "Sustainable Regional Growth and Development in the Creative Knowledge Economy", 19-23 August 2010, Jönköping, Sweden
This paper investigates how family ownership, control and management affect firm investment performance. We use the identity of the CEO and the COB to establish under what management the firm is: founder, descendent or external management. The analysis shows that founder management has no effect on investment performance in family firms, whereas descendant management has a negative impact on firm performance and having external hired managers significantly improves investment performance. Moreover, we examine the effects of dual-class shares; we find that the separation of voting right from cash-flow right has a negative impact on performance in both family and non-family firms, but the negative effect is larger in family firms.