"The Impact of Family Ownership, Management and Governance on Performance Volatility"

In the last decades volatility in returns, cash flows and sales has steadily increased. Understanding drivers of performance volatility is therefore of high interest. The present study examines the role of family influence on performance volatility. Agency theory and the resource-based view are integrated to explain differential effects of family ownership, and family involvement in management and governance on performance volatility. Using panel data from German large family and non-family businesses between 2000 and 2009 it is shown that family ownership increases performance volatility, while family involvement in management and governance result in decreased volatility of performance.