1 Do family firms outperform non-family ones? A panel data analysis of Western European corporations

This paper aims to analyze whether family control contributes to increase the market value of the firm, and to disentangle whether family businesses outperform their non-family counterparts in Western Europe. Interesting results are provided by using the Generalized Method of Moments to estimate our models. We find that family ownership concentration impacts positively on firm value, even when the general blockholder effect is controlled for. The better performance of family firms is mainly due to the presence of family members in the board of directors and the founder influence inside the company. The provided evidence furthermore shows that ownership concentration in the hands of a family can be an internal control mechanism that substitutes for the lack of external protection of minority shareholders ’ rights. Overall, our results support a positive effect of family control on firm value consistent with the potential benefits associated to family owners