The Role of Family Control on Financial Performance of Family Business in Gebze

Abstract

This paper analysis the role of family control on financial performance of family business by using the key financial data of family businesses of 16 firm registred to Gebze Chamber of Commerce. In this paper, financial performance of a family business is measured by using Return on Assets, Return on Sales and Total Debt/Total Assets ratios. The family member CEO is more successful as far as ROA ratios concerned, but is less successful as far as TD/TA ratios concerned, in comparison to non family member CEO. In other words, the non family member CEO is more successful as far as TD/TA ratios concerned, but is less successful as far as ROA ratios concerned, in comparison to family member CEO. Additionally, as far as ROS ratios concerned, there is no significant difference between family member CEO and non family member CEO. Overall, the results are consistent with the hypotheses that there is difference between ROA of family member CEO and non family member CEO, and there is difference between TD/TA of family member CEO and non family member CEO. Keywords: Family business; Family control; Financial performanceJEL Classifications: G32; G34