Colombian Family Capitalism in the Twentieth Century: Business Heterogeneity, Strategic Behavior, and Growth

Abstract

In Colombia, families and the State own and control big businesses. Even small and medium firms in the economy's legal, informal, and illegal sectors are owned and controlled by families. Despite its centrality, family firms exhibit a high heterogeneity in terms of strategic behavior, governance mechanisms, and performance. This chapter analyzes the Colombian family business's major characteristics and evolution from 1910 to 2022. After the introduction to the evolution of family capitalism in Colombia, we propose an analytical model to explain patterns and changes in family business strategies and governance forms and advance some hypotheses about why some family firms have failed. In contrast, others have survived and grown in a relatively stable and “clientelist” institutional setting but a highly fragmented-isolated market and violent society. Our historical narrative links the features and changes in business contexts and the family system to deploying diversification and responsible strategies, impacting family firms’ performance over time. Our discussion reveals some commonalities and particularities of Colombian family capitalism while enduring turbulence.