Effects of family ownership and family management on the performance of entrepreneurial firms

Extending past research, this paper proposes that the quadratic inverse-U relationship between family ownership and the performance of entrepreneurial firms when moderated by the presence of family management and external blockholding. Specifically, it proposes that both factors exacerbate the decline in performance when the proportion of family ownership in entrepreneurial firms remains high. The proposed hypotheses are tested on ten years of panel data from a sample of European firms. Analysis of data supports the hypotheses. Implications for the theory and practice of entrepreneurial firms are discussed.

Automated summary

This paper extends previous research by proposing that the relationship between family ownership and performance of entrepreneurial firms follows a quadratic inverse-U shape, which is moderated by family management and external blockholding. The hypotheses are tested on ten years of panel data from European firms and the analysis supports the proposed relationship. The findings have important implications for the theory and practice of entrepreneurial firms.