Family firm performance in Europe: An institution-based view

Dahlia Darweesh, 2011


This study empirically examines the performance of family firms and non-family firms in Europe, while using the institution-based view; in particular, whether family firms outperform nonfamily firms in countries that have a strong legal environment. The sample consists of 224 publically traded firms in France, Italy, and Greece. The institutional variables used to examine the legal environment of the three countries are rule of law, control of corruption, and anti-self-dealing index. The regression analysis reveals that there is no significant relationship between firm ownership and firm performance when the institutional variables are excluded. However, evidence suggests that the institutional variables do have a positive relationship with firm valuation, and that family firms have a higher valuation compared to nonfamily firms when managed in countries with good legal protection.


family business, firm performance, institution-based view, legal institutions, minority shareholder protection