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Ownership structure and financial performance of Spanish port service companies

Abstract

The Spanish port system represents approximately 20% of the transport sector’s GDP. We analyse the impact of ownership structure, in particular the family characteristics of Spanish port services companies, on profitability. Our study reveals that the ownership of these companies is highly concentrated, with more than 80% having a dominant shareholder, while over 60% are in the hands of a family, which in most cases is the only shareholder. Of the port services themselves, we find that the most profitable one is pilotage, with an average Return on Assets (RoA) of 26%, while the least profitable port service is cargo handling (7.8%); the rest have similar returns, ranging between 12 and 14%. In terms of the ownership-profitability relationship, the results lead us to conclude that companies with one sole or dominant shareholder are more profitable. We show that profitability declines when the sole shareholder is a member of the family. We also find that companies in which the family maintains ownership in second or successive generations are more profitable than those of the first generation. These results suggest that the existence of other, non-family, shareholders reduces the negative influence of the family, and that the alleged greater degree of professionalization of managers in second and successive generations contributes to improving the results of family businesses. We believe our results are applicable to other family businesses outside the port domain.

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Notes

  1. 1.

    When it represents at least 5% of the capital, as well as when it affects members of the board of directors.

  2. 2.

    Dyck and Zingales (2004), in their study of listed companies, also consider the level 50%, to obtain the majority of shares.

  3. 3.

    http://www.puertos.es/es-es/Paginas/Consulta-Registro-General-Empresas-Prestadoras-de-Servicios.aspx. Date accessed: November 2016.

  4. 4.

    The Official State Bulletin (BOE) dated May 13th 2017 published the Royal Decree—Law 8/2017 of May 12th which modifies the regulation of workers providing cargo handling services and operations, in order to comply with the sentence of the European Court of Justice of December 11th 2014, in the case C-576/13 (infringement proceeding 2009/4052). After several months of debates and negotiations with the affected sectors, and since the expectations of the previous RD-law 4/2017 were not fulfilled (it was revoked on March 16th, 2017), this Royal Decree is the second attempt of the Spanish Government to regulate the situation of cargo handling services and operations. There is an obligation for SAGEP to comply to market conditions prior to May 2020.

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Acknowledgements

We want to express our gratitude to the MEL reviewers for all their suggestions which, without any doubt, have contributed to improving our work.

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Correspondence to María Victoria Ruiz-Mallorquí.

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Appendix

Appendix

See Table 7.

Table 7 Definition of variables

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Aguiar-Diaz, I., Ruiz-Mallorquí, M.V. & Trujillo, L. Ownership structure and financial performance of Spanish port service companies. Marit Econ Logist 22, 674–698 (2020). https://doi.org/10.1057/s41278-019-00130-w

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Keywords

  • Ownership structure
  • Family business
  • Performance
  • Profitability
  • Ports
  • Spain