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Large family-owned businesses from the Valencian Community contribute 14 points more to employment than the Spanish average

The Corporate Governance, Strategy and Competitiveness (GECE) Observatory, created by Bankia and Ivie, presents its first results

On Tuesday, 12 June 2018, Ivie and Bankia presented the first results of the GECE Observatory, an initiative created with the objective of analyzing the levels of competitiveness of Valencian firms over time and the factors and internal causes that contribute to making businesses more competitive. This first report reveals that large family-owned businesses from the Valencian Community contribute 14 points more to employment and to generating value added than the total number of family-owned businesses in Spain (64% vs. 50%).

Participating in the presentation of the Observatory, which was held at the Bankia headquarters in Valencia, were José Sevilla (CEO of Bankia), Francisco Pérez (Ivie Research Director), Alejandro Escribá (Ivie Researcher and Director of the Universitat de València Chair of Family Business) and José Manuel García Trany (Corporate Business Manager for the Valencian, Murcia and Balearic Regions at Bankia).

The first report of the GECE Observatory serves as the baseline to determine the current level of competitiveness of the Valencian firms. To achieve this, a large sample of Valencian firms has been used considering their size, sectoral specialization, and level of contribution to employment and value added, in addition to monitoring their efficient use of human capital, profitability and financial stability.

A firm’s size is the key element to meet today’s needs and challenges and to achieve higher levels of productivity. The Valencian firms have a problem regarding their size, since, on average, they have 16.1 employees compared to the Spanish average of 19.5 workers per firm.  Also, according to the report, the economic contribution of large- and medium-sized firms from the Valencian Community is less than the average total of Spanish firms, as their contribution to employment is 6 points below the national average and their share in value added of production is 9 points below the Spanish average.

However, these figures differ when analyzing family-owned businesses, a prevailing model in the Valencia Community with 91.1% of the firms in the region being family-owned. Valencian family-owned businesses are greater in size when compared to family-owned businesses in other regions of Spain.  In the sample used, the Valencian family-owned firms have on average 10 more employees than family-owned firms in Spain (39.6 vs. 29.1 employees per firm). Furthermore, large- and medium-sized Valencian family-owned businesses contribute 14 points more to employment and value added than the Spanish average (64% vs. 50%).

The first GECE Observatory report also analyzes a firm’s efficient use of human capital, profitability, financial stability and sectoral specialization. Additionally, the Observatory examines the weight of knowledge- and technology-intensive sectors, which is below the national average in the case of the Valencian Community.

The results of the Observatory will be disseminated through quarterly reports, focusing on three aspects: competitiveness of Valencian firms, the influence of the characteristics of their governing bodies and management and the contribution of their strategic approaches.  In addition, short informative notes will be developed and public events will be organized to present the results that will include specific cases of success regarding corporate governance, strategy and competitiveness.