Do family ties shape the performance consequences of diversification? Evidence from the European Union Articles uri icon

publication date

  • July 2012

start page

  • 469

end page

  • 477

issue

  • 3

volume

  • 47

international standard serial number (ISSN)

  • 1090-9516

electronic international standard serial number (EISSN)

  • 1878-5573

abstract

  • This paper examines the moderating effect of family involvement in ownership and control on the relationship between diversification strategies - both product and international diversification - and corporate performance. We argue that this moderating effect is related to the distinctive characteristics of family firms compared to non-family firms. The empirical evidence is provided by a sample of firms from the European Union during the 2005-2009 time period. Our results found that family firms are more profitable than non-family firms when they engage in joint product and international diversification.

keywords

  • family firms ; product diversification ; international diversification ; performance; eu