Family firms

Profitability and performance of family firms

Norwegian family-owned firms generally outperform nonfamily-owned firms. Similar results have been documentet i multiple other countries.

One might take this to indicate that family ownership is superior but this logic suffers from the hen and the egg problem: do family firms perform better because they are governed better or is it rather that highly profitable firms are able to retain control within the (founding) family? In the latter case, high profitability arises from some competitive advantage of the firm, which alleviate the family's need to sell equity to raise finance.

More to be added.