Emeritus Professor of Marketing
Ludo Van der Heyden
Emeritus Professor of Technology and Operations Management
Associate Professor of Finance
FAMILY FIRMS;PERFORMANCE;STOCK MARKET ANALYSIS;AR2006;AR0506;RD0306; WICFE; Governance, parallel planning, strategy, boards
The authors find that family firms in France, Germany and the UK do not fare worse on the dimensions of Tobin's Q and ROA, relative to non-family firms. In addition, their stock returns are well explained by a four-factor model as well as a multifactor model based upon Fama-MacBeth type regressions.In contrast to findings by Fahlenbrach (2005) for the US, the authors do not find that founder CEO firms in France display significant abnormal returns. However, they do find that who manages the family firm results in significantly different risk exposures of the family firm relative to non-family firms.These different exposures seem to be at the heart of differences in ROA and Tobin's Q, and may be one reason why Amit and Villalonga (2005) and Sraer and Thesmar (2005) find a significant drop in these two variables from founder to heir managed family firms.