Family Constitution and Business Performance: Moderating Factors

Arteaga, R. and Menéndez-Requejo, S. (2017): Family Constitution and Business Performance: Moderating Factors. Published in: Family Business Review , Vol. 4, No. 30 (November 2017): pp. 320-338.

Abstract

This study analyzes the relationship between implementing a Family Constitution (Protocol) and future family business performance. We analyze a unique sample of 530 Spanish family businesses. Half of these firms received financial aid from the government to implement a Family Protocol during 2003-2013. The analysis reveals that family businesses that implemented a Family Constitution had significantly improved performance within two years after the implementation. The positive relationship between the implementation of a Family Constitution and future firm performance is stronger for firms that had a non-family CEO, had multiple family owners or were controlled by later generations.

• Item Type: MPRA Paper
• Language: English
• Keywords: Family Constitution; Family Protocol; performance; family firm heterogeneity; agency theory
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill; G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers ; Acquisitions ; Restructuring ; Corporate Governance; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L21 - Business Objectives of the Firm; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M10 - General

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