DP15398 Dynastic Control without Ownership: Evidence from Post-war Japan

Author(s): Morten Bennedsen, Vikas Mehrotra, Jungwook Shim, Yupana Wiwattanakantang
Publication Date: October 2020
Keyword(s): Family control, ownership, Succession
JEL(s): G32, L26
Programme Areas: Financial Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15398

Dynastic-controlled firms are led by founding family CEOs while the family owns an insignificant share of equity (defined as less than five percent). They represent 7.4% of listed firms in post-war Japan, include well-known firms such as Casio, Suzuki and Toyota, and are often grouped with widely-held firms in the literature. These firms differ in key performance measures from both traditional family firms and non-family firms, and evolve from the former as equity-financed growth dilutes the founding family's ownership over time. In turn, the transition from dynastic control to non-family status is driven by a diminution of strategic family resources.