Villalonga, BelénAmit, Raphael H2023-05-222023-05-222010-01-012016-06-23https://repository.upenn.edu/handle/20.500.14332/40517We test what explains family control of firms and industries and find that the explanation is largely contingent on the identity of families and individual blockholders. Founders and their families are more likely to retain control when doing so gives the firm a competitive advantage, thereby benefiting all shareholders. In contrast, nonfounding families and individual blockholders are more likely to retain control when they can appropriate private benefits of control. Families are more likely to maintain control when the efficient scale is small, the need to monitor employees is high, investment horizons are long, and the firm has dual-class stock.This is the peer reviewed version of the following article: Villalonga, B. and Amit, R. (2010), Family Control of Firms and Industries. Financial Management, 39: 863–904., which has been published in final form at doi: 10.1111/j.1755-053X.2010.01098.x. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving: http://olabout.wiley.com/WileyCDA/Section/id-820227.html#terms.Business Administration, Management, and OperationsEntrepreneurial and Small Business OperationsArticle