Not All Created Equal

Abstract

This study extends the family firm performance literature by focusing on birth order differences among descendant CEOs. Data collected from a sample of Korean family firms yield three insights. First, descendant birth order is directly associated with differences in the distribution of control through ownership, leadership (i.e., CEO), and the incorporation of outside board participation and governance. Second, descendant birth order also moderates the relationship between outside block holdings and firm performance. Third, we find evidence suggesting that because of firm performance differences, first-son descendant CEOs may find themselves more often replaced over time.