This study examines the differences between founder-controlled firms and firms controlled by descendants or relatives of the founder. In general, we observe that founder-controlled firms grow faster and invest more in capital assets and research and development. However, descendant-controlled firms are more profitable. The results are consistent with a life-cycle view of the family firm in which the early years are characterized by rapid growth. The experience of the early years provides a basis for later, when the firm is more professionally run and can exploit its established position in the market.
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