The influence of the CEO in listed family businesses
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Date
2019
Authors
Sánchez Pulido, Laura
Gallizo Larraz, José Luis
Moreno Gené, Jordi
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Abstract
Purpose: Our objective is to analyze the influence that the type of CEO has on the management of
listed family businesses in Spain, distinguishing between whether the CEO is a family member or not.
The study mainly focuses on his/her influence on levels of profitability.
Design/methodology: During de period from, 2012 to 2016, with data coming from Iberian Balance
Sheet Analysis System (SABI) database. To analyze the effects of the CEOs on family businesses, we
carried out two kinds of analyses. First, a univariate analysis that allowed us to identify differences
regarding profitability, financial structure, growth, and dividend payout policies, and secondly, a linear
regression model to see the influence—as well as the effect and significance—that variables, including
the type CEO, had on profitability.
Findings: Our results show the existence of a double effect on the profitability of family businesses of
having an outside CEO. First, there is a statistically significant negative effect that is derived from the
non-family CEOs’ increased propensity to take on debt, and secondly, there is a positive causal effect on
businesses’ profitability that has to do with the different management styles that outside CEOs bring to
the table, as they are more focused on profits. The results support the importance of having non-family
CEOs in listed family businesses in Spain.
Research limitations/implications: Our study focused on family businesses listed on the Spanish
stock market, which means that the number of companies that were analyzed was reduced and the
results cannot be extended to other kinds of businesses. However, this fact did enable us to get more
high-quality data and focus on a specific field that was appropriate for considering the problem we
proposed.
Originality/value: While many studies have compared the performance of family businesses with that
of non-family businesses, few have considered that family businesses are not homogeneous and that
they have different management styles. And, These styles are determined by the type of CEO that is
leading the company; this fact is analyzed empirically in this article.
Citation
Journal or Serie
Intangible Capital, 2019, vol. 15, núm. 2, p. 128-142