TY - JOUR AU - Bertrand,Marianne AU - Johnson,Simon AU - Samphantharak,Krislert AU - Schoar,Antoinette TI - Mixing Family With Business: A Study of Thai Business Groups and the Families Behind Them JF - National Bureau of Economic Research Working Paper Series VL - No. 13738 PY - 2008 Y2 - January 2008 UR - http://www.nber.org/papers/w13738 L1 - http://www.nber.org/papers/w13738.pdf N1 - Author contact info: Marianne Bertrand Booth School of Business University of Chicago 5807 South Woodlawn Avenue Chicago, IL 60637 Tel: 773/834-5943 Fax: 773/702-0458 E-Mail: marianne.bertrand@chicagobooth.edu Simon Johnson MIT Sloan School of Management 100 Main Street, E52-562 Cambridge, MA 02142 Tel: 617/290-9618 Fax: 617/253-2660 E-Mail: sjohnson@mit.edu Krislert Samphantharak IR/PS UC, San Diego 9500 Gilman Drive La Jolla, CA 92093-0519 Tel: 858/534-0627 Fax: 858/534-3939 E-Mail: krislert@gmail.com Antoinette Schoar MIT Sloan School of Management 100 Main Street, E62-638 Cambridge, MA 02142 Tel: 617/253-3763 Fax: 617/258-6855 E-Mail: aschoar@mit.edu AB - Families run a large fraction of business groups around the world. In this paper, we analyze how the structure of the families behind these business groups affects the groups' organization, governance and performance. To address this question, we constructed a unique data set of family trees and business groups for nearly 100 of the largest business families in Thailand. We find a strong positive association between family size and family involvement in the ownership and control of the family business. The sons of the founders play a central role in both ownership and board membership, especially when the founder of the group is gone. The availability of more sons is also associated with lower firm-level performance, especially when the founder is no longer present. We identify a possible governance channel for this performance effect. Excess control by sons, but not other family members, is associated with lower firm performance. In addition, excess control by sons increases with the number of sons and with the death of the founder. One hypothesis that emerges from our analysis is that part of the decay of family-run groups over time may be due to a dilution of ownership and control across a set of equally powerful descendants of the founder, which creates a race to the bottom in tunneling resources out of the group firms. ER -