The main objective of this research is to investigate the effect of family ownership on the performance of listed companies in Tehran Stock Exchange during 2007-2011. In this study, the family ownership as the independent variable and its effect on return on assets as the firm performance criterion has been studied. Family companies in the research refers to those companies that at least 20% of their shares individually or in group belongs to the members of a family, or at least one of the family members or in-laws is the member of the board of directors or the executive manager of the company and is actively participating in board of directors' activities. The results of the analysis of 95 companies during 2007-2011 show that family ownership has a direct and positive effect on performance of firms (Return on Assets) and the family ownership of 50% and above has a direct and significant effect on the performance of firms and for the lower levels the effect is not significant. Moreover, it was indicated that as the family ownership increases, the intensity of its effect on the firm performance increases, too. Family ownership has a direct and positive effect on firms' performance (ROA).
