Outside directors and firm performance across family generations in Lebanon

Salloum Charbel 1 Bouri Elie 1 Salloum Laura Catherine Mercier-Suissa 2
1 USEK - Université Saint-Esprit de Kaslik
2 Centre de Recherche Magellan
Abstract : This paper investigates the relationship between the percentage of outside directors and financial performance in non-listed family firms while considering the generational effect. Using longitudinal data on 322 Lebanese firms covering the period 2008–2010, a regression analysis indicates that firm profitability depends upon the percentage of outside directors only in second and later generations. In first-generation family firms, the replacement of an inside director by an outsider has no significant impact on performance. In contrast, in the second and subsequent generations, outsiders can be used as an effective governance mechanism to reduce agency costs and thus enhance performance. Local entrepreneurs and regulators could build upon these results to implement better corporate governance practices in order to enrich the growth and prosperity of Lebanese family firms.
Keywords : non-listed family firms outside directors. board of directors family generations financial performance Lebanon
Type de document :
Article dans une revue
International Journal of Business Performance Management, Inderscience, 2016, 17 (2), pp.147-160
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https://hal-univ-lyon3.archives-ouvertes.fr/hal-01178458
Contributeur : Catherine Mercier-Suissa <>
Soumis le : lundi 20 juillet 2015 - 10:31:19
Dernière modification le : vendredi 11 mars 2016 - 12:58:56

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Salloum Charbel, Bouri Elie, Salloum Laura, Catherine Mercier-Suissa. Outside directors and firm performance across family generations in Lebanon. International Journal of Business Performance Management, Inderscience, 2016, 17 (2), pp.147-160. 〈hal-01178458〉

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