KDI 경제정보센터

I propose a novel measure to identify family firms based on the number of family links between high-ranking co-workers. Leveraging this measure, I reexamine previous findings in the literature and derive five novel facts: (1) Measures of stock ownership misclassify firms with a large family presence. (2) Family-run firms outperform non-family firms. (3) Differences in valuations between family-run and non-family-run firms are amplified by selection. (4) Family-run firms are more cost-effective. (5) Family managers behave myopically. I conclude that failing to consider family links can lead to highly misleading results in the study of family firms.