Working Paper: CEPR ID: DP15398
Authors: Morten Bennedsen; Vikas Mehrotra; Jungwook Shim; Yupana Wiwattanakantang
Abstract: Dynastic-controlled firms are led by founding family CEOs while the family owns an insignificant share of equity (defined as less than five percent). They represent 7.4% of listed firms in post-war Japan, include well-known firms such as Casio, Suzuki and Toyota, and are often grouped with widely-held firms in the literature. These firms differ in key performance measures from both traditional family firms and non-family firms, and evolve from the former as equity-financed growth dilutes the founding family’s ownership over time. In turn, the transition from dynastic control to non-family status is driven by a diminution of strategic family resources.
Keywords: Family Control; Ownership; Succession
JEL Codes: G32; L26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| dynastic control firms (L22) | represent significant portion of listed firms in postwar Japan (L22) |
| traditional family firms (L22) | dynastic-controlled firms (L22) |
| ownership dilution (G32) | transition to ex-family status (J12) |
| loss of family resources (J12) | loss of dynastic control (N40) |
| dynastic-controlled firms (L22) | superior accounting performance (M41) |
| dynastic-controlled firms (L22) | underperform relative to traditional family firms (L25) |