Research on the performance of family firms is growing, but results are mixed, especially for nonlisted companies. Thus, on the basis of the co-presence of benefits and disadvantages of family involvement in ownership and management, we explored the presence of nonlinear effects of these two variables on performance. We run regression analyses on data drawn from 620 privately held family firms in Italy: A negative quadratic relationship between family involvement in management and performance was found, but we did not find any association between family involvement in ownership and performance. Our results suggest that in privately held firms the positive effects that previous literature associates with the presence of family managers do not appear strong enough to compensate for the disadvantages deriving from a nonmonetary goal orientation, nor do they compensate for the costs deriving from the need to solve conflicts between family managers and the impossibility of enlarging the company's social and intellectual capital through the employment of nonfamily managers. Moreover, the quadratic nature of the relationship calls for greater attention to be paid to these effects by family business owners, especially in those cases where family involvement in management is high.
Valuation And Market Timing In Private M&A Transactions
