In progress Research Proposal: The Strategic Costs and Benefits of Family Ownership and Control



Family firm research has gained traction in both the management and finance literature in the past decade. One of the most fundamental questions asked in the literature is how family firms differ from non-family firms, and how this impacts family firm governance, behaviour and outcomes. Whilst previous research has established that family firms pursue socioemotional wealth, plan for the long run, benefit from reduced agency costs and face immense succession issues, many facets of this question are left unexplored.

This dissertation aims to contribute to this ongoing discussion in the literature by addressing three distinct research gaps. The first proposed study is on the topic of shareholder heterogeneity and decision making costs in family firms. Using unique, hand-collected German data we aim to assess the impact of ownership heterogeneity on shareholder dissent from an agency theoretical perspective. We furthermore introduce the theory of enterprise developed by Henry Hansmann (1988, 1996) into this stream of literature. Our second study concerns the topic of acquisition behaviour in family firms, but takes a unique stance by assessing acquisition deals in Europe from the perspective of the target. Our aim is to analyse whether family firms face premiums or discounts when they are acquired, and how succession, amongst other factors, affects this relationship. By covering both private and public family firms in Europe, this study can contribute both empirically and theoretically to the family firm governance and acquisition premia literature in a unique way. Finally, we aim to address a growing concern in the strategy and governance family firm literature on the topic of Socioemotional Wealth Theory. Due to the lack of operationalisability of this dominant, commonly used concept, empirical studies on family firms have struggled to provide answers to some of our most pressing questions. More specifically, by detangling the concept of socioemotional wealth, and by developing a cost benefit framework of the family firm, we may be able to develop more systematic and operationalisable understanding of the family firm. Doing so could shed new light on the benefits and drawbacks of family firm governance, and provide new directions for empirical work in the field.


Family firms; corporate governance; family ownership; family control; relational blockholders; shareholder heterogeneity; ownership heterogeneity; shareholder voting; acquisition premia; socioemotional wealth theory; agency theory; stewardship theory; generational succession; panel data; MLM

Time frame

2016 - 2020


Family controlled firms are globally the most prevalent form of enterprise organization and the single largest source of value creation in the world. Although many think of mum and dad street corner shops when they hear the word family firm, some of the worlds largest and most successful firms, such as Samsung and BMW for example, are family owned and controlled. This research project will be about relatively large family firms across Europe, and will investigate the strategic costs and benefits of family ownership and control from a strategic and cross-country comparative perspective.

Large family firms face unique strategic and governance challenges that they do not share with other forms of enterprise organization. These challenges involve succession, finance, strategy, internationalization, ownership and governance. Because these unique challenges tend to become more severe the more generations of family members are involved in the firm, family firms typically do not survive beyond the fourth generation, as they are acquired by other firms, go public, or simply go out of business.            

In spite of these unique challenges, however, research has shown that under certain conditions, family firms may outperform other types of firms. Although research has identified some of the sources of this apparent competitive advantage, the picture that emerges is currently far from complete.

This PhD project aims to contribute to mapping the strategic costs and benefits of family ownership and control from a strategic and comparative perspective, using panel data from several European countries. Issues that may be investigated involve:

  • Ownership and governance
  • Strategy
  • Business model innovation
  • Entrepreneurship
  • Internationalization
  • Mergers and Acquisitions

It intends to use, and contribute to, the data management facilities of the Erasmus Centre for Strategic Competitiveness Research; a recently funded data management centre in the Department of Strategic Management and Entrepreneurship.

Supervisory Team

Hans van Oosterhout
Professor of Corporate Governance and Responsibility
  • Promotor
Abe de Jong
Professor of Corporate Finance and Corporate Governance
  • Promotor