The role of family governance beyond financial ratios. An integrated perspective to family firms’ survival

Descrizione Progetto

Abstract

In the years following the economic and financial crisis, Italy, where most firms are family-owned, has seen the demise of more companies than any other country. To avoid a similar disaster in the future, it is important to understand which determinants inf0luence firms’ survival. Stemming from financial and family business literature, this paper investigates the role of ̄financial ratios and family corporate governance in predicting family firms’ survival probability. To obtain empirical evidence, it performs a mediating regression analysis using a sample of 273 Italian family ̄rms. The main findings show that family ownership concentration and the presence of a family CEO increase ̄rms’ survival probability, while a high number of family members involved in the firm and the co-presence of more generations hinder it.

Keywords: Survival probability; prediction models; family business; corporate governance; financial ratios.