The Iniquitous Influence of Family Ownership Structures on Corporate Performance

Abstract

This study investigates the issue of family ownership for Indonesian companies through a detailed analysis of the ‘ultimate’ share control. A key finding in this study is that ownership type directly impacts on economic performance for Indonesian companies. There are distinct and dramatic differences between the higher return on assets (7.37%) for non-family firms as compared to the far lower profit (1.56%) figures by family-controlled firms. The evidence raises concerns about possible profit manipulation and the entrenchment of profits.