Rather relevant given the succession going on under Rupert Murdoch
| Peter Klein |
Interesting new paper shows that keeping senior management positions within the family reduces firm performance:
Inside the Family Firm: The Role of Families in Succession Decisions and Performance, by Morten Bennedsen, Kasper M. Nielsen, Francisco Pérez-González, Daniel Wolfenzon
This paper uses a unique dataset from Denmark to investigate the impact of family characteristics in corporate decision making and the consequences of these decisions on firm performance. We focus on the decision to appoint either a family or external chief executive officer (CEO). The paper uses variation in CEO succession decisions that result from the gender of a departing CEO’s firstborn child. This is a plausible instrumental variable (IV), as male first-child firms are more likely to pass on control to a family CEO than are female first-child firms, but the gender of the first child is unlikely to affect firms’ outcomes. We find that family…
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Utopia, you are standing in it! 
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