Ownership structure and firm performance: Evidence from Israel

Beni Lauterbach, Alexander Vaninsky

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84 Scopus citations


The study examines the effect of ownership structure on firm performance. We distinguish between family firms, firms controlled by partnerships of individuals, concern controlled firms, and firms where blockholders have less than 50% of the vote. The empirical work analyzes data on 280 Israeli firms and employs the technique of Data Envelopment Analysis. It is found that owner-manager firms are less efficient in generating net income than firms managed by a professional (non-owner) manager, and that family firms run by their owners perform (relatively) the worst. This evidence suggests that the modern form of business organization, namely the open corporation with disperse ownership and non-owner managers, promotes firm performance.

Original languageEnglish
Pages (from-to)189-201
Number of pages13
JournalJournal of Management and Governance
Issue number2
StatePublished - Jun 1999


  • Family firms
  • Firm performance
  • Owner-managers
  • Ownership structure


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