All in the family? CEO choice and firm organization

In this paper we investigate the relationship between family control and firm organization and performance in the manufacturing sector of primarily emerging economies. To do this we collect a new detailed dataset of the succession history in terms of ownership (who owns the shares) as well as control (who is the CEO) for over 800 firms in Latin America, and Southern Europe. We merge this with a unique dataset on firm performance and organizational structures, including on quality of managerial practices. We exploit exogenous variation in the composition of the family CEO’s children, and use it as an instrumental variable for family ownership and control. To consider mechanisms, we focus on Brazilian firms and merge the Brazilian WMS data with the Brazilian Industrial Survey (PIA) and the employer-employee matched dataset (RAIS).