Diversification and family control as determinants of performance: A study of listed business groups

The study analyses the individual and joint impact of family control and diversification on the perfor-mance of major Spanish corporations, considering the nature of the ltimate owner of non-family groups.The study uses a sample of ninety-nine Spanish corporations, each comprising a parent company listed onthe stock exchange and a set of subsidiaries. Heckman’s two-step correction is used to eliminate selectionbias and the endogeneity of family ownership. Different models are contemplated in which we alysethe impact of both diversification and the family nature of a business on performance, established asTobin’s q-value. The results show how family control has a egative impact on Tobin’s q-value, and thatdifferences are greater between family groups and non-family groups controlled by banks and/or foreignagents. They also show ow diversification does not affect the creation of value either individually orconsidering the possible moderating effect of family ownership.