Abstract
This empirical paper revisits the fundamental issue of family business in Japan or the magnitude of family business, highlighting the family’s ownership and influence in the listed family firms. The research questions are: how is the family influence transformed since its founder, and which is more important to maintain the family influence, management or ownership? Analyzing every firm listed in stock markets in Japan, to find out the family influence, tracing it from the founder, the paper contributes to the literature with the following findings: First, the paper identifies 1,898 family firms or 54.8% of listed in the stock markets in Japan, far exceeding the literature. Second, categorizing those family firms regarding the family’s influence both in ownership and management, it analyzes the family’s influence to model the family firm transformation. Third, recognizing the interaction between the family’s influence in the ownership and management, it argues that family’s ownership is most fundamental to exert its influence, and the process to weaken its influence is seldom reversible. The paper addressed three implications, for policy makers, family members, and researchers, before arriving at the conclusion. The limitation of the paper is the lack of the historical observation of the ownership dilution process, which, if added, would have given more dynamic picture of the family firm transformation process. Further research needs to be made not only in this respect, but also the global comparison to make the paper’s findings more universal.
