Context matters! Insights into family ownership of listed firms across Europe

Abstract

This study explains family ownership of listed firms in developed countries using a holistic perspective that integrates three approaches: the formal institutional context, cultural context, and socio-economic development. We hypothesize that in developed economies, where economic development is robust and formal institutional voids are less pronounced, there is an interaction between culture and the quality of formal institutions that helps explain family ownership. Specifically, culture becomes more important in influencing family ownership of listed firms as the quality of formal institutions increases. We analyse the ownership composition of a large sample of listed firms from 17 European countries over the period 2009-2015. After conducting descriptive statistics and bivariate correlation analysis to screen the data, we employ panel-data Tobit models to test the hypotheses. Overall, our study contributes to the current debate on context theorising in the family business field by demonstrating that family ownership is unevenly distributed due to contextual dimensions.