To address succession issues, the owners of family firms increasingly transfer their equity to family and charitable foundations, thereby creating so-called foundation-owned firms. This form of succession has become increasingly common in various European countries. A small yet insightful stream of research has emerged comparing the performance of foundation-owned firms against the performance of nonfoundation-owned firms. Our study goes one step further and accounts for the heterogeneous nature of foundation-owned firms. We investigate the role of foundation purpose (family versus charitable foundation), stock market listing, and family involvement. Our results show that firms owned by a family foundation have better accounting performance than firms owned by a charitable foundation. We further find a performance-enhancing effect of family involvement in the firm's management or supervisory board. Contrary to our expectations, we did not observe significant performance differences between private and stock market-listed foundation-owned firms. Our study advances the emergent stream of the foundation-owned (family) firm literature by integrating research on foundation-owned firms with research on family firms. Furthermore, we contribute to the corporate governance literature on ownership effects and blockholder ownership.

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Keywords Charitable foundation, Family foundation, Family involvement in the firm, Foundation, Foundation-owned firm, Performance
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Journal Journal of Family Business Strategy
Block, J.H, Jarchow, S. (Svenja), Kammerlander, N. (Nadine), Hosseini, F. (Florian), & Achleitner, A.-K. (Ann-Kristin). (2020). Performance of foundation-owned firms in Germany: The role of foundation purpose, stock market listing, and family involvement. Journal of Family Business Strategy. doi:10.1016/j.jfbs.2020.100356