The Impact of Family Ownership on Financial Performance Essay

The Impact of Family Ownership on Financial Performance - Essay Example Another problem with application of the data to test the equation is possible existence of other variables that the used data failed to control. While the research focused on studying effect of family ownership on performance, many factors to organizational performance exist that could confound the analysis results. Ensuring control was therefore necessary and could be achieved through identification of possible confounding variables and analyzing organizations with similar levels measurement of the variables. Analysis of potential effects of the variables for adjustment measures would also remedy their confounding effect to ensure suitability of the data in testing the model. Small sample size is another problem that that testing the model with the data faces. External validity is a significant factor to quantitative research and defines the potential to generalize findings from a sample to a population. The measure is directly proportional to sample size and the small sample size m eans that developed information and conclusion from the analysis cannot be inferred to performance of the categories of companies in Hong Kong. This limits the scope of qualitative research and renders the analysis ineffective (Hays and Singh, 2011). The probability value for the coefficient estimate informs the decision on its statistical and economic relevance. The probability value of 0.15, which is relatively small, means that the coefficient estimate for the relationship is statistically significant for an 80 percent confidence interval. This high probability cannot be ignored and justifies the decision for statistical relevance. Statistical significance is however more precise than economic significance by observing set limits for the significance. Contrary to this, economic significance exists even with a minimal probability of occurrence, as well as there is a chance. A probability of 0.15 for beta means a probability of 85 percent exists for a