The determinants of family firms' subcontracting: A transaction cost perspective

Esra Memili, James J. Chrisman, Jess H. Chua, Erick P.C. Chang and Franz Kellermanns

Journal of Family Business Strategy, 2011, vol. 2, issue 1, 26-33

Abstract: In this article we compare the governance choices of family and non-family firms regarding their subcontracting tendencies. Based on transaction cost theory, we argue that family firms are less likely to engage in subcontracting than non-family firms and that kinship ties, the extent to which a family firm's production activities are important, and cost minimization concerns influence the extent to which family firms utilize subcontractors. Using a sample of small, established firms, we find support for our hypotheses as well as for the use of transaction cost theory logic to explain family firm behavior.

Keywords: Transaction; cost; theory; Family; business; Subcontracting (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (9)

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