Performance of Nordic public family firms : comparable analysis of Nordic public family firm’s performance against the Fama and french five-factor model
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- Master Thesis 
This thesis examines the stock market performance of family firms in the Nordic region. Specifically, we investigate whether an investor would have earned higher returns by investing in Nordic family firms than being passively invested in the five factors of Fama and French during the last 20 years. Furthermore, we attempt to find if there are any differences with respect to abnormal return between the four included countries: Denmark, Finland, Norway, and Sweden. We have defined a family firm as a firm where the founder, or individuals related to the founder either by blood or marriage, has at least 20% ownership. Active participation by the family is not necessary, but rather a right. We create a portfolio of 291 family firms, in total, and use the Fama and French five-factor model to see if the family firm portfolio has achieved an abnormal return during the period January 1, 2000, to December 31, 2019. We find that our value-weighted Nordic family firm portfolio generates an average monthly abnormal return of 2.19%, and the result is significant at a 0.1% level. This suggests that during the last 20 years an investor would have been better off investing in Nordic family firms compared to being passively invested in the five factors of Fama and French. This finding is robust to Nordic market performance and stricter definitions of family firms. Moreover, family firms in Denmark show the highest abnormal performance, and there is one large danish firm that greatly impacts our results. Despite our positive findings for family firm performance, our results are ex-post and thus only show historical performance and is consequently not an indicator for future performance for family firms in the Nordic region.