Firm ownership and productivity: A study of family and non-family SMEsSmall business economics
Date of this Version11-19-2011
Document TypeJournal Article
AbstractMotivated by a lack of consensus in the current literature, the objective of this paper is to reveal whether family firms are more or less productive than non-family firms. As a first step, this paper links family business research to the theoretical notion that family involvement has an effect on the factors of production from a productivity standpoint. Second, by using a Cobb–Douglas framework, we provide empirical evidence that family labour and capital indeed yield diverse output contributions compared with their non-family counterparts. In particular, family labour output contributions are significantly higher, and family capital output contributions significantly lower. Interestingly, differences in total factor productivity between family and non-family firms disappear when we allow for heterogeneous output contributions of family production inputs. These findings imply that the assumption of homogeneous labour and capital between family and non-family firms is inappropriate when estimating the production function.
Citation InformationFrank Barbera and Ken Moores. "Firm ownership and productivity: A study of family and non-family SMEs" Small business economics (2011) p. 1 - 24 ISSN: 0921-898X
Available at: http://works.bepress.com/ken_moores/34/