Managerial and Decision Economics · 1996 · 135 citations · 0 references
ManagementCorporate GovernanceAgency TheoryCapital StructureContract TheoryCapital Structure DeterminantsCapital Structure TheoryCorporate Governance MechanismsFamily OwnershipOwnership StructureTransaction Cost EconomicsCorporate Control StructuresCorporate Ownership StructureEconomic Value AnalysisFamily Business OwnershipFirm Financial PerformanceFirm PerformanceOwner-manager RelationshipsOwnership Structure Effects
The ‘managerial’ and the ‘contractual’ theories of the firm imply different causes and consequences for the relationship between ownership and performance of firms. This paper provides a test of the two conflicting theories, using ownership and performance data from a sample of Spanish family- and non-family-controlled firms. We find evidence in support of the contractual theory of the firm, according to which firms choose their ownership structure maximizing economic value, net of contractual costs.