17 October 2023
San Sebastian Campus
Succession in family businesses is a major challenge for the Basque economy, given that 66% of the companies analysed have an individual or a family as the maximum shareholder. These data come from the Basque Business Groupsreport carried out in collaboration between Orkestra and Deusto Business School, with the support of the Basque Finance Institute. The report offers a comprehensive vision of the Basque Country through the analysis of the 4,136 business groups in the region. Of these, 2,802 are Basque groups with a total of 10,253 subsidiaries, approximately 54% in the Basque Country, 20% in other Spanish regions and 26% abroad.
The report, whose authors are Aitor Garmendia-Lazcano and Laura Baselga-Pascual, from Deusto Business School, and Ibon Gil de San Vicente, Eduardo Sisti and Imanol Aizpuru Arruti from Orkestra, describes the shareholding structure of companies in the Basque Country, showing the relevance of business groups. It also proposes a methodology to identify and classify these business groups operating in the Basque Country. In this way, the picture of these groups for the year 2022 is shown, describing their characteristics according to the location of their parent company and distinguishing between Basque, Spanish (from outside the Basque Autonomous Community) and foreign groups.
For each of these categories, an analysis is made of certain attributes that the literature on business groups considers relevant, such as the sophistication of their strategies, sectoral diversification and intra-group financing mechanisms. It also provides details of the business groups which generate most employment in the Basque Country.
Opening up of the economy
The paper highlights that business groups are a clear indicator of the openness of our economy. Their development seems to drive internationalisation strategies, both through export activity (31.6% of group-affiliated companies export, compared to 12.2% of independent companies) and through the creation of subsidiaries abroad.
Basque business groups currently control a total of 2,623 subsidiaries abroad, with a significant presence in the United States, Mexico and Brazil. In little more than a decade, these three countries have replaced the United Kingdom, France and Portugal as the most important international destinations for Basque groups. This evolution demonstrates the growing interest of Basque groups in investing in the American continent compared to the European market.
Another indication of the openness of our economy is the participation of 1,334 business groups in Basque companies from outside the Basque Country. They represent 32% of the business groups in the Basque Country and are involved in 2,527 companies. If we look at the twenty largest foreign groups in terms of employment with Basque subsidiaries, the energy, industrial, commercial and transport sectors stand out.
The report concludes that, given the importance of business groups in the Basque economy, the financing mechanisms that accompany them should continue to be strengthened to promote their roots, boost their competitiveness and foster economic development in the Basque Country. Full report.
