Using Artificial Intelligence to Measure the Family Control of Companies

Using Artificial Intelligence to Measure the Family Control of Companies

Mario Daniele Amore, Valentino D’Angelo, Isabelle le Breton-Miller, Danny Miller, Valerio Pelucco, Marc van Essen

Series number :

Serial Number: 
950/2024

Date posted :

January 20 2024

Last revised :

January 20 2024
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Keywords

Many studies have focused on family firms. Yet, grasping the nature of these organizations remains challenging because firms’ familiness can take many forms, which are hard to trace with traditional data. We use AI to unravel the complex and intangible influence of families on firms in large datasets.

Whereas it classifies family firms often consistently with equity criteria, AI is able to gauge families’ legacy and values. As a result, using AI allows to detect more family firms in countries where families have a strong influence on firms even without large equity stakes. Importantly, AI distinguishes between family and lone-founder firms, and it assigns higher scores to firms that are eponymous, heir-led, and with multiple family directors. Finally, classifying family firms by using AI provides financially-relevant information to investors.

Authors

Real name:
Valentino D’Angelo
Real name:
Isabelle le Breton-Miller
Real name:
Danny Miller
Real name:
Valerio Pelucco
Real name:
Marc van Essen