مدیران بانکدار و عملکرد شرکت: آیا شرکت های خانوادگی متفاوت هستند؟ Banker directors and firm performance: Are family firms different?

1. Introduction The growth and emergence of family firms has been a widely debated topic in recent years. According to La Porta, Lopez-de-Silanes, and Shleifer (1999), 65% of the 20 largest firms in Argentina had a family stake of at least 20%; in Japan, this was 5%. Anderson and Reeb (2003a, 2003b) document that in the US, 35% of the S&P500 firms are those with family ownership. A research report by Credit Suisse (2011) finds that family-owned companies controlled 50% of the over 3500 publicly listed companies in ten major Asian economies: the share was the highest for India at over 65% and the lowest for China at 13% (See also, Claessens, Djankov & Lang, 2000; Claessens, Djankov, Fan & Lang, 2002). The presence of family firms has raised important questions as to whether it is an efficient organizational form. On one side of the debate, it has been argued that having a large minority shareholder can ensure effective monitoring and thereby ameliorate agency problems (Shleifer & Vishny, 1986). Following from this argument, several studies adduce evidence in support of this contention (Anderson & Reeb, 2003a, 2003b; Barontini & Caprio, 2005; Villalonga & Amit, 2006; Ghosh, 2010). Focusing on a sample of Western European family firms, Maury (2006) for example find that family firms exhibit better performance than firms controlled by non-family block holders. Critics of this argument contend that by putting their own interests before minority shareholders, family ownership might end up aggravating agency problems and impede performance (Faccio, Lang & Young, 2001; Dyer, 2003; Perez-Gonzalez, 2006; Morck & Yeung, 2003). Another strand of the literature highlights the importance of bankers in enhancing corporate governance in firms. Research based on advanced economies indicate that bankers not only play the role of expertise provider (Booth & Deli, 1999), but in several instances, improve the bank’s business opportunities (Dittmann, Maug & Schneider, 2010). Earlier, Kroszner and Strahan (2001) had demonstrated that bankers are less likely to be represented on boards of firms when the monitoring costs overwhelm the benefits.2 More broadly, using data on non-listed Spanish family firms, Arosa, Iturralde, and Maseda (2010) document a negative impact of outside directors on performance. In this context, using an extended sample of Indian firms for the period 1996–2012, the article investigates three major hypotheses. First, are family firms more likely to have banker nominee on their boards? In India, 70% of the firms are family-controlled (Piramal, 1996). This lowers the likelihood of principal-agent conflict (Carney, 2005), in turn, reducing the importance of the monitoring role of the board. That being the case, the importance of bankerdirectors in family firms could actually be much less significant. Second, how does non-bank debt influence firm capital structure? Besides provision of debt, banks have other channels of influence over firms, such as through interlocking directorates. We examine whether this channel matters for firm behaviour. Finally, how important are banker-director in family firms in influencing performance, especially given their varying intensity of involvement? There are several reasons as to why these are important questions and India presents a compelling laboratory for examining these issues. First, in emerging economies such as India, the presence of family firms spans several industries and product lines. van der Molen (2005) found that Indian families operate in an average of 5.4 industries.