The impact of family control on firm performance: Evidence from Portugal and Spain

• This study analyzes the impact of family control on performance in listed firms.
• We extend previous studies by including two complementary analyzes: financial and stock market performance.
• Portuguese and Spanish family firms have at least similar performance as non-family firms.
• This study highlights the importance of CEO identity and age and size effects to explain firm performance.
• We confirm the relevance of behavioral theory in corporate governance issues.

This study aims to assess performance differences between family and non-family firms, taking into account the Portuguese and the Spanish stock markets. We provide new evidence for this field since we take into account the heterogeneity among family firms. Our thesis is that the leadership of family firms, and the firm's size and age are moderators of the relationship between family control and firm performance. Using a panel data methodology, our main results show that family firms, especially the smaller and older, exhibit at least the same performance as non-family firms. Based on the results of the study, who manages the family firm does matter through influence on a firm's risk exposure and financial performance. These findings are consistent with the behavioral agency perspective: the family's desire to maintain socio-emotional wealth, and also to assure the firm's performance and survival. This study makes several theoretical and methodological contributions.