A ndrew carnegie, a 19th-century ty-coon, famously said that inherited wealth "deadens talents and energies"-one reason why he gave most of his fortune to charity. Business research tends to support the Carnegie thesis. Companies controlled by heirs often underperform competitors that have professional managers. Except, apparently, in Japan. A forthcoming paper in the journal of Financial Economics finds not only that inherited family control is still common in Japanese business, but that family firms are "puzzlingly competitive", outperforming otherwise similar professionally managed companies. "These results are highly robust and...suggest family control 'causes' good performance rather than the converse," say the authors.
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