*4.5. Additional Analysis*

To check the performance difference between different types of family firms, we did further analysis following the Saito (2008) approach. Accordingly, we separated the family firms into two groups: family firms run by founders and founding family members. The results are shown in Table 9. As Table 9 portrays, family firms run by the founder's family members outperform the family firms run by founders concerning Tobin's Q. This result is in line with the findings of Saito (2008). However, we found that family ownership reduces the performance of founder run family firms as far as the ROA is concerned, but Tobin's Q does not evidence the same. By contrast, family ownership significantly improves the performance of family firms run by the founder's descendants when Tobin's

Q is taken into account. However, such evidence is not pronounced with ROA. Similarly, factors such as institutional ownership and government shareholding encourage the performance of both types of family firms (founders and founders' descendants).


**Table 8.** Random effect regression results in controlling for time and industry effects.

Note: \*\* meaning *p*-value is less than 0.01; \* meaning *p*-value is less than 0.05.

**Table 9.** Regression results for family firms run by founder and founding family members (fixed-effect model).


Note: \*\* meaning *p*-value is less than 0.01; \* meaning *p*-value is less than 0.05.

However, as opposed to the firms run by founders' family members, foreign ownership is not found to be a significant factor for firms run by founders. This means that firms run by founders' descendants can utilize foreign shareholdings to boost firm performance following Japan's recent financial policy that encourages foreign ownership. Besides, we found that factors such as board independence and board meetings appear to be the significant factors for inhibiting the performance of firms run by founders' descendants. In contrast, such evidence is not pronounced for family firms run by founders. Moreover, we did not find any significant performance differences between these two types of family firms for the remaining cases.

Finally, we note that family firms run by founding family members tend to perform better over the family firms run by founders. Furthermore, foreign ownership encourages the performance of firms run by the founders' descendants. However, we note that further studies incorporating management strategies are required to reveal the performance difference between these two groups of family firms. Moreover, more studies with longer time and multiple angles are warranted to generalize our findings.
