Firm ownership and productivity: a study of family and non-family SMEs

Francesco Barbera () and Ken Moores ()

Small Business Economics, 2013, vol. 40, issue 4, 953-976

Abstract: Motivated 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. Copyright Springer Science+Business Media, LLC. 2013

Keywords: Heterogeneous input elasticity; Family firm; Cobb–Douglas production function; Total factor productivity; D22; D24; J24; M11; L26 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (33)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:sbusec:v:40:y:2013:i:4:p:953-976

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DOI: 10.1007/s11187-011-9405-9

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