The Family Effect on Brand Performance in Large United States Firms

While prior literature suggests that family firms with a positive corporate image are associated with superior financial performance, their effectiveness in creating firm brand value is not well understood. In this paper, we use Interbrand's global brand value data published between 2001 and 2017 to examine the effect of family ownership and family-named firms on brand value creation. Our findings indicate that within the sample of large global firms, family firms exhibit lower brand value compared to nonfamily firms. Moreover, after controlling for agency cost variables, effective corporate governance does not improve brand value for family firms. Cross-sectional analyses reveal that the difference in brand value between family and nonfamily firms is attributable to those family firms whose founders do not hold significant power. Furthermore, we observe that family firms, whether they have a family name as part of their company name, tend to have lower brand value than nonfamily firms. Keywords Brand value, Family firm, Family management, Family firm name.
1. Introduction Family firms play a vital role in the U.S. economy, representing about 35 percent of companies listed on the Standard & Poor's 500 Index, employing a significant portion [...]