Corporate performance of family-controlled firms

: evidence from Covid-19 pandemic times

Abstract

The present report was developed to contribute to existing research on the potential impact of family presence in the firm management team in the company’s profitability, measured using ROA (EBITDA based). Additionally, and more specifically, this study analysis if family presence exacerbated or attenuated the expected effects associated with COVID on firm profitability.The analysis was deployed by using data from S&P 500 firms collected over the period of 2016 to 2021, in order to have data referring to pre-Covid era (2016 to 2019) and during Covid time (2020-2021), where the pandemic has exerted most of its pressure on firms’ performance. Firms were then classified in family or non-family firms according to the presence of at least on family member on the board of directors, according to the 2021 family firm index developed by EY and the university of saint Gallen1. Finally, the data was used to conduct univariate and multivariate analysis that included both simple regression models and difference in difference models that contributed to capture the potential effect of family presence in firm profitability.In sum, the achieved results in univariate analysis appear to denote that family firms, on average, depict lower ROA’s than their non-family counterparts. Similarly, on the other hand, the results achieved with the regression models denote that family firms tend to decrease firm profitability. Furthermore, when considering the covid-19 pandemic event, results depict a similar negative contribution of family presence on firm performance.

Date of Award	25 Jan 2023
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Pramuan Bunkanwanicha (Supervisor)