Do family ties shape the performance consequences of diversification? Evidence from the European Union

This paper examines the moderating effect of family involvement in ownership and control on the relationship between diversification strategies - both product and international diversification - and corporate performance. We argue that this moderating effect is related to the distinctive characteristics of family firms compared to non-family firms. The empirical evidence is provided by a sample of firms from the European Union during the 2005-2009 time period. Our results found that family firms are more profitable than non-family firms when they engage in joint product and international diversification. (C) 2011 Elsevier Inc. All rights reserved.