The Life Cycle Of Family Ownership: A Comparative Study Of France, Germany, Italy And The U.K.
Source: University of Oxford
Using firm-level data for the largest four European economies, this paper analyzes the evolution of ownership of the largest 4,000 companies, private or listed, in France, Germany, Italy and the U.K. over the 1996-2006 period. The authors find that family ownership in the U.K. follows a life cycle: U.K. family firms evolve into widely held companies as they age, while Continental European ones do not. The stability of family firms is related to their profitability relative to non-family firms: in Continental Europe family firms are more profitable than non-family firms (but not in the U.K.). They also find that in the U.K. family ownership is diluted more quickly in sectors that are more dependent on external capital but not so in Continental Europe.