Does family CEO enhance corporate performance? The case of Jordan

Abstract

There is a high level of family ownership among Jordanian firms, which is perceived to be the reason why family members are often appointed as CEOs. Advantages and drawbacks of having a family CEO, who tends to concentrate corporate control within the family and minimize ownership dispersion, continue to be debated widely. This study adds to this debate by focusing on the under-researched Jordanian context, where family companies are prominent. A sample of 56 Jordanian listed family firms and 392 firm-year observations for 2009 to 2015 have been used to determine that overall family CEOs are negatively related to corporate performance. This finding is applicable to both accounting-based and market-based performance, stemming from the ROA and Tobin's Q test results. Further analysis shows an increased negative effect in family firms where non-family shareholders have greater ownership. The study concludes that increases in the level of ownership concentration leads to devaluation among Jordanian family firms.

Family CEO and company performance during the COVID-19 crisis: The case of Cameroon

“…For family companies, size is thus not a factor of performance in periods of crisis. This result is in line with those of Saidat et al (2020) in Jordan. For the sector of industry (SECTACT) variable, the results are in line with those of Khanchel (2009).…”

“…For Models 5 to 8, the two variables FAMDOM and FAMCEO are equivalent because the sample only includes firms in which more than 50% of the capital is owned by the family. These findings contradict those obtained by Miller et al (2014) in Italy, Sánchez Pulido et al (2019) in Spain and Saidat et al (2020) in Jordan but are in line with Miller et al (2013) and Amore et al (2021) who find that the management of the company by a member of the owner family or majority shareholder is a factor that enables the performance of the company to be acceptable in difficult times. These two mechanisms which are linked by common values enable the company to react faster in times of crisis.…”

Determinant Factors of Founding-Family Firms’ Performance in Indonesia

“…CEOs have an important role in the firms since they are the main actor to execute the strategy in daily operational business. CEO status of founding-family member captures the founding-family member to execute business strategy and improve performance (Saidat et al, 2020). CEO status of a founding-family member is measured by a dummy variable where score 1 if CEO is the founding-family member and score 0 if otherwise.…”

Success from the perspective of female entrepreneurs

“…In social terms, a female entrepreneur can be considered successful if her actions bring benefits to society, particularly, contributing to social responsibility regarding employees (Mishchuk et al, 2020), but at the same time she is considered to be successful if her entrepreneurial activity is closely related to her individual motivations or achievement of goals. The perception of goals achievement and used indicators of business success can differ essentially due to the conditions of business activity, determining by entrepreneurial surrounding (Paudel & Devkota, 2018;Saidat et al, 2020).…”