Advanced-economy firms – read, U.S. and European companies – are far more likely to be publicly-held compared to emerging market firms, according to research by the McKinsey Global Institute. In fact, companies based in countries like China and India are overwhelmingly family-owned. Why does this matter? Writing on HBR.org, Richard Dobbs, Tim Koller, and Sree Ramaswamy argue that a family- or government-owned structure allows companies to prioritize long-term investments over short term market gains. In many cases, this means mergers and acquisitions to grow quickly while also remaining nimble. It's just one of the reasons the authors warn that the era of remarkable profits for Western firms may be coming to a close.
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