“Why do families exit their corporations” by Yupana Wiwattanakantang
National University of Singapore
University of Alberta School of Business
Kyoto Sngyo University
It is widely thought that family control is rare when the firms grow larger over time. Our analysis, which is based on listed firms in Japan since 1949, however, challenges the conventional view. Using Japanese data, we show that even 50 years after IPO the founding family remains in control in almost 80% of the firms in our sample. We document that many families keeps the controlling positions in their firms even when ownership is diluted. Family firms that survive are those that manage to solve not only constrains imposed by the family but also financial constrains in particular via the family’s unique assets namely reputation, networks of financiers, and competent human resources.