Department of Economics
Tel: 011- 45-3815-2607
NBER Working Papers and Publications
|July 2006||Inside the Family Firm: The Role of Families in Succession Decisions and Performance|
with Kasper M. Nielsen, Francisco Pérez-González, Daniel Wolfenzon: w12356
This paper uses a unique dataset from Denmark to investigate the impact of family characteristics in corporate decision making and the consequences of these decisions on firm performance. We focus on the decision to appoint either a family or external chief executive officer (CEO). The paper uses variation in CEO succession decisions that result from the gender of a departing CEO%u2019s firstborn child. This is a plausible instrumental variable (IV), as male first-child firms are more likely to pass on control to a family CEO than are female first-child firms, but the gender of the first child is unlikely to affect firms%u2019 outcomes. We find that family successions have a large negative causal impact on firm performance: operating profitability on assets falls by at least four percentag...
Published: Bennedsen, Morten, Kasper Meisner Nielsen, Francisco Pérez-González, and Daniel Wolfenzon. "Inside the Family Firm: the Role of Families in Succession Decisions and Performance." Quarterly Journal of Economics 122, 2 (2007): 647-691.