آیا خانواده های بنیانگذار بلاک هولدرخاص هستند؟بررسی کنترل نفوذ سهامداران بر عملکرد شرکت

This paper examines how family and non-family ownership affects the performance of Swiss listed firms from 2003 to 2010. We distinguish between these two types of controlling shareholders since they have different objectives. We hypothesise that only family shareholders have a real incentive to reduce agency costs whereas non-family blockholders are similar to widely held companies. Our results show that family firms are more profitable than companies that are widely held or have a non-family blockholder. For market valuations we find that the family stake plays a critical role and document a concave relationship between family ownership and Tobin’s Q. We also investigate the impact of different features of family firms on performance, and document that the generation of the family and the active involvement of the family play an important role for market valuation.

This paper examines how founding family ownership affects the market and accounting performance of public companies as compared to companies with other types of ownership structures. It pays special attention to three features of family ownership: the level of the family stake, the generation of the family and the degree of involvement of family members. The paper relates to the recent stream of empirical literature on the effects of concentrated ownership on firm performance. Until recently, the dominant paradigm in academic literature was that most public companies were widely held. The main challenge was to provide remedies to the classical agency problem present in such corporations. Berle and Means (1932) and later Jensen and Meckling (1976) are among the first to state that the separation between ownership and control can cause problems and incur important costs to shareholders. However, a series of recent studies on ownership structure reveals that in most markets a large number of listed companies do not have a widely dispersed ownership structure. In general, they have one or more large shareholders that can be categorised as families, states and other industrial or financial companies. Among these types of owners, family firms appear to be the most common form of ownership. In an international study, La Porta et al. (1999) find that 30% of firms are family controlled while 36% are widely held. Faccio and Lang (2002) show that family firms are the predominant ownership structure in continental Europe wherein 44% of the companies are family controlled. They also show that firms with non-family blockholders represent 20% of the sample. Claessens et al. (2000) observe that in Asian countries approximately two-thirds of firms are owned by families or individuals. Even in the US, a market considered to have a majority of companies with a dispersed ownership, Anderson and Reeb (2003) establish that around 35% of companies in the S&P 500 are family controlled. This result has extensive repercussions on agency conflicts between owners and managers. This new view on ownership structure calls for a careful analysis of the consequences family ownership has on agency theory and company performance. Early literature on family firms finds that these firms seem to be more profitable and have a higher market valuation than non-family firms. It seems therefore that family ownership might be a way to reduce agency costs existing between managers and shareholders, and thus contribute to more value creation. The potential benefits associated with the presence of a majority shareholder are not new. Berle and Means (1932) already considered this possibility. Such a shareholder would have a far bigger incentive to control management since a large part of his wealth is invested in the company. As a result, every shareholder would benefit from this situation.1 The presence of a large shareholder can diminish or at least not aggravate the classical conflict between firm owners and managers, and thus reduces agency costs (agency costs I). However, the potential benefits of having a large shareholder in a company can be limited by the appearance of another type of agency problem. Large shareholders can use their power (in terms of votes and insider knowledge) to extract private benefits from the company. This will result in agency costs shifting from those between managers and owners to those between large shareholders and minority shareholders (agency costs II), which might be even more detrimental to minority shareholders. The extraction of private benefits is in the centre of this problem. Since the seminal paper of Grossman and Hart (1980), different authors have tried to quantify the magnitude of private benefits. Based on a sample of 39 markets worldwide, Dyck and Zingales (2004) observe that, on average, private benefits of control amount to 14% of equity value. These results indicate that agency problems between large and minority shareholders are a relevant issue. Problems are aggravated by the fact that many classic corporate governance mechanisms such as takeover threats or monitoring from institutional investors may become partly or completely ineffective especially if the controlling shareholder exercises a management position in the company or holds a majority stake. This position of knowledge and therefore power will also translate itself into the possibility to extract private benefits. From a theoretical point of view, it is not clear which of the two effects prevails in companies with a large shareholder. An increased monitoring of management that results in a better alignment of interests between owner and manager is positive, while the extraction of private benefits or entrenchment of a large shareholder is harmful to minority shareholders. We believe that it is essential to consider the identity of the controlling shareholder and especially the distinction between family and non-family blockholders to determine which of the two effects prevails. Different types of blockholders have different incentives and motivations that will affect their way of perceiving the company and minority shareholders. Considering family firms, Arregle et al. (2007) suggest that families do care about their companies as they constitute the majority of their wealth and are part of their identity and patrimony. This and the fact that the reputation, professionalism and perception of the family within its social environment are directly linked to the company works as a strong incentive to follow a long term strategy and behave in a way that is not purely self-centred (Ward, 2004 and Miller and Le Breton-Miller, 2005). Thus, family members may expropriate less as their main interest is not primarily pecuniary (Corbetta and Salvato, 2004) and may control outside managers more thoroughly. It is therefore likely that agency costs I and II are of less importance in these firms. For companies with other types of large shareholders, the above-mentioned incentives are less stringent. For example in a company in which the state is a large shareholder, the person representing the state does not have as high an incentive to monitor managers as a family member. He himself is only an employee of the state and as such his own wealth is not directly affected by suboptimal decisions of company management. Moreover, this person will probably have other mandates that will ask for his time, and he will not be able to fully concentrate on a specific company. Furthermore, negative news will not impact him as much as it would a family that is closely linked to the company and for whom company reputation equals family reputation. We consequently posit that family companies will behave very differently from companies with non-family blockholders which should have an impact on firm performance. Despite the considerable research conducted in the field of family business, the distinction between the family and non-family blockholder has not attracted much attention yet. In this paper, we try to fill this gap by using panel data over the period 2003–2010 for a comprehensive sample of companies listed on the Swiss exchange. The Swiss market is characterised by a high ownership concentration, with owners ranging from founding families to private investors, the State or other corporations. The law and finance literature relates concentrated ownership to the quality of legal protection of investors provided by the commercial law of a country. La Porta et al. (1998) observe that Switzerland is a German-origin civil law country and find that it offers relatively weak investor protection. Switzerland, moreover, ranks low on the anti-self-dealing index proposed by Djankov et al. (2008). These results indicate that minority shareholders are potentially exposed to private benefit extraction by controlling shareholders. However, despite this low investor protection environment, the Swiss market is a very developed financial market according to several indicators. For instance, the total market value to GDP ratio, is the second highest in the world after Hong Kong. This can be explained by the fact that Switzerland is a small open economy with a limited scope to grow domestically. It, therefore, has to create a favourable business environment to attract foreign capital and at the same time companies have to look abroad to expand their market and spur their growth. This might lead to the voluntary adoption of good corporate governance practices that go beyond law requirements and/or to lower levels of rent extraction to attract international capital. In this specific corporate governance context the impact of a family shareholder on firm performance is an open question. In view of the above, we examine whether founding family owners have a different impact on accounting and market-based performance as compared to companies with a different blockholder type. In our research, we consider Tobin’s Q and Return on Assets (ROA) as performance measures. Employing a fixed effect model, we analyse the different characteristics of founding family firms to study the difference in performance. First, special emphasis is put on active management and generation of family members. The employment of family members as CEO or as Chairman should have an influence on performance, as a family member’s decisions can have a strong impact on the company. It equally helps the family to either better control outside managers and therefore mitigate agency costs I, or to extract even more private benefits which would increase agency costs II. Generational differences might equally impact performance as descendants might have different motivations and values than founders and be more prone to expropriation. We also examine the distinction between companies with a single individual or with multiple founders or family members having a key role in the firm. Furthermore, we take a closer look at companies in which families have a very large stake (more than 80% of voting rights) as this might increase agency costs II as nobody can contest their decisions, and they are free to do what suits them best. Our main results show that founding family firms (i) systematically have a higher accounting-based performance as compared to widely held companies and those with a non-family blockholder and (ii) do not have a higher market-based performance than non-family firms. We also find that the effect of family ownership on firm performance appears to be different depending on the percentage of voting rights controlled by the family. It appears that firms in which the family has a moderate stake have a better performance than firms where the family has a high stake. This study contributes to existing literature in three important ways. First, it expands knowledge in the fast rising field of family firms. This field has gained impetus since Anderson and Reeb (2003) but has so far focused mainly on market and accounting performance as compared to either non-family firms or widely held companies. With the exception of Maury (2006) and Andres (2008), the impact of blockholder identity on performance has not received much academic attention. Research on the link between identity and performance is important as it helps to draw inferences on how agency costs between controlling and minority shareholders can be reduced most effectively. Moreover, it sheds light onto family attributes that are associated with better firm performance. Second, the paper explicitly considers the role of the ownership stake on performance. A few papers in the field have considered the possibility of having a nonlinear relationship between family stake and performance. Our study shows that such a relationship exists, proposes new results and indicates that the level of ownership plays a key role on performance. Third, the article provides the characteristics and scope of ownership structure and their relation to performance of firms in Switzerland. Evidence in this field and on this market is non-existent to the best of our knowledge. Moreover, this country presents a special corporate governance setting. It displays a low legal investor protection environment that is counterbalanced by a strong law and order tradition and a significant improvement of governance practices over the last decade. Even outside Switzerland, the relation between blockholder identity, familyness and performance is not widely researched; the focus is rather on family performance vs. non-family firms. This approach may be inappropriate since in most countries there are not only widely held companies or family companies but also a fraction of firms having non-family blockholders that are likely to behave differently from families. The remainder of this paper is structured as follows: Section 2 reviews the relevant evidence relating family ownership to firm performance while Section 3 concentrates on the institutional setting. Section 4 describes the sample and provides descriptive statistics. Section 5 introduces the methodology and presents results on the relationship between family ownership, other blockholders and firm performance. Section 6 focuses on robustness tests and Section 7 summarises and concludes.

Theory suggests that classical agency conflicts between managers and shareholders may be reduced for firms with a large shareholder because these have an incentive to control management. This reduction of agency problems should enable a company to create additional value for all shareholders. However, another type of agency problem between majority and minority shareholders may emerge. The extraction of private benefits by the majority shareholder can potentially have a value destroying effect on the firm. The literature interprets the results on family firm performance in the light of these two opposite effects. The conclusions so far are mixed as several studies show that family firms create value and are more profitable than non-family firms while others find that family firms do not outperform other companies. However, these findings do not make a clear distinction among non-family firms. These range from firms with a widespread ownership base to companies having a large non-family blockholder. This paper provides new evidence on the performance of founding family firms. It focuses on the difference in market- and accounting based performance for companies with different ownership structures. It distinguishes founding family firms from companies that either have a non-family blockholder or are widely held. In particular, we want to find out if all companies with a controlling shareholder can mitigate agency costs or if founding family firms have a special characteristic that allows them to outperform other company types beyond the reduction of agency costs. We investigate this issue on a sample of 185 Swiss firms over the period 2003–2010. In general, we find that founding family firms are more profitable than other companies while their market valuations are not different from those of other firms. We also find that high profitability is associated with higher valuations for all company types, including family firms. This apparent paradox is due to the relation between performance and specific family firm characteristics. In particular, we find a nonlinear concave function between the level of family ownership and performance. A more detailed analysis reveals that firms in which a family has a large stake (more than 80%), are as profitable as firms with non-family controlling shareholders but have significantly lower valuations. In this case, investors consider the potential for family opportunism as being too high. On the other hand, family firms with moderate ownership levels show a significantly higher profitability that translates into higher valuations. The family presence in these firms appears to be beneficial as it lowers the classical agency problem and the conflict of interest between majority and minority shareholders. These results for Swiss family firms should also be related to the specific corporate governance environment in which they operate. Since the Swiss legal environment potentially favours rent extraction by controlling shareholders, family firms are not expected to display a better performance. However, this poor legal investor protection is counterbalanced by the country’s strong law and order tradition, its low corruption and its adoption of good international corporate governance practices (by notably reducing the use of dual-class shares). Our results indicate that family firms are only perceived as potentially problematic at high ownership levels. At moderate stakes, the effect of strong law and order tradition prevails and family ownership appears to be beneficial for all shareholders. Our paper also provides a more detailed analysis of family firm characteristics and their impact on firm performance. We examine different specificities of family firms that generally confirm that high levels of ownership have a strong negative impact on market valuations. A notable exception is related to the presence of a lone founder that is active in the firm and holds a large stake. In these firms, profitability and valuations are significantly higher than in other companies. In conclusion, our results show that the impact of the presence of family firms on performance is not uniform but that it depends on several factors. Among them, the level of family ownership plays a key role. Our results might also explain the conflicting results that have been obtained in the literature so far since most studies have not considered explicitly the role of the level of ownership on performance.