Family as a success factor
A new study by DZ BANK Research shows: Family businesses are of great economic importance for Germany: over 90 percent of businesses are family-owned. They are not only located in urban areas, but often also in rural regions. In some cases, they are of enormous importance for the economic structure there.
The Corona pandemic is also leaving its mark on family businesses. According to an ifo survey, around 80 percent of businesses suffered a drop in orders last year.
Family businesses are facing structural challenges. Demographic change will strongly influence the future development of businesses. In the context of generational change, a suitable successor is not always found, and the shortage of skilled workers is also a problem in many industries and rural regions.
On the technical side, digitalisation is changing established business models and structures. Especially in rural areas, however, the expansion of the digital infrastructure is not yet far advanced. Here, it is the task of the state and local authorities to help businesses.
Family businesses play a significant role on stock exchanges, especially in Europe. There are between 700 and 900 listed family businesses in Europe. Within the last 15 years, the share prices of these companies have outperformed the broad share indices.
There are several reasons for the better share price performance. The owners have a clear focus on sustainable and long-term growth and not on individual quarterly results, as salaried managers sometimes do.
But there are not always only success stories among family businesses. Many owner-managed businesses have failed in recent years, not least because of personal disputes within the family. Investors who want to invest in shares of family businesses should therefore look carefully beforehand. In a recent study, we ourselves analysed the German family-owned companies BMW, Hella, Merck and Wacker Chemie, as well as the European companies Kering ("Gucci"), Inditex ("Zara") and Heineken.
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