|Author Name||MORIKAWA Masayuki (Senior Fellow, RIETI)
|Creation Date/NO.||July 2008 08-J-029|
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This article, by using a unique dataset of a large number of Japanese firms, empirically investigates the relationship between the structure of shareholding and productivity, survival, and managerial objectives. The focus is on the distinct traits of family firms, which compose the majority of Japanese firms.
According to the results, the managerial objectives and performance of family firms are qualitatively and quantitatively different from those of non-family firms. Specifically, 1) productivity growth of family firms are significantly slower than non-family firms, after controlling for firm size, firm age, and industry; 2) family firms' probability of survival is higher than that of non-family firms; and 3) even after controlling for the high propensity to survive, family firms' productivity growth is slower.
As family firms' management objectives are different from non-family firms, these results cannot be interpreted normatively. However, it is desirable to expand ownership options by reducing barriers to going public or transferring ownership.