Small Business Economics

, Volume 33, Issue 3, pp 353–373 | Cite as

The influence of family ownership on SME performance: evidence from public firms in Taiwan

  • Wenyi Chu


The relationship between family ownership and firm performance has gained increased attention in the business strategy and financial economics literature. Most existing studies use large companies as the research sample; studies that explicitly investigate the influence of family ownership on the performance of small- and medium-sized enterprises (SMEs) remain sparse. This study raises this issue explicitly by investigating the influence of founding-family ownership on the return on assets and Tobin’s q of 341 public SMEs in Taiwan, during the period of 2002–2006. It emerges from the data that family ownership is prevalent and substantial in Taiwan, representing half of the public SMEs and accounting for more than 11 percent of their outstanding equity. It was found that the influence of family ownership on SME performance is positive and significant. Overall, the results suggest that family ownership is an effective organizational structure for SMEs in Taiwan.


Family ownership Family firm Performance SME 

JEL Classifications

G32 L25 L26 M1 



The helpful comments on the earlier version of this paper from Constantinos Markides, participants of the Academy of Management Annual Meeting, Strategic Management Society Annual Conference, the editor of this Journal and two anonymous reviewers, are gratefully acknowledged. This paper also benefits from the financial support provided by the Taiwan National Science Consul. All errors remaining are the author’s.


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Copyright information

© Springer Science+Business Media, LLC. 2009

Authors and Affiliations

  1. 1.National Taiwan UniversityTaipeiRepublic of China

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