Journal of Management and Governance

, Volume 22, Issue 4, pp 829–862 | Cite as

Ownership structure, investors’ protection and corporate valuation: the effect of judicial system efficiency in family and non-family firms

  • Luigi Lepore
  • Francesco PaoloneEmail author
  • Domenico Rocco Cambrea


Research on the effect of ownership structure on firm performance shows no convergent evidence concerning the sign and form of the above-mentioned relationship. Similarly, there is no homogeneous evidence documenting family ownership concentration is always positively or negatively correlated with firm value, or irrelevant. This paper analyses whether and how the de facto investor protection provided by the judicial system affects the relationship between corporate performance and ownership structure in 1314 firms operating in four European countries (Germany, France, Italy, and Spain) over a five-year period, 2010–2014. Moreover, we analyse whether judicial system efficiency influences if and how family firms in the controlling coalition collude for expropriating minority shareholders. Our findings show that the level of shareholder protection, derived from judicial efficiency, is relevant to the relationship between ownership structure and firm performance, thus corroborating literature in that institutional contexts matter in explaining such relations. The results suggest the need for more efficient external mechanisms of corporate governance to facilitate investment in equity capital, thus decreasing the country risk perceived by investors.


Corporate governance Ownership structure Family firm Firm performance Judicial system efficiency 


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Authors and Affiliations

  1. 1.Department of LawParthenope University of NaplesNaplesItaly
  2. 2.Department of Accounting, Business and EconomicsParthenope University of NaplesNaplesItaly
  3. 3.Department of Management and TechnologyBocconi UniversityMilanItaly

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