Family Business and Financial Performance: What are the Effects of Tax Cut Policy on Them in Uzbekistan?

Yusupov Jasurbek and Sakata Kei
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Yusupov Jasurbek: The State Tax Committee of Uzbekistan, Tashkent, Uzbekistan
Sakata Kei: Former School of Economics, Ritsumeikan University, Shiga, Japan

International Journal of Innovation and Economic Development, 2020, vol. 6, issue 4, 27-45

Abstract: This study is the first comprehensive empirical study to examine the relationship between the family business and the firm’s performance in Uzbekistan. In this research, we investigate the relationship between family firms and financial performance using enough extensive unbalanced panel data from 2012 through 2015 on 3148 non-banking/non-government firms. Moreover, we analyze the impact of tax cut policy on SMEs, including family firms from a case study of Uzbekistan by using the difference-in-difference estimator. These two will be a major contribution to the family business study field in Uzbekistan. The results show that family businesses have on average 2.02 per cent higher return on assets than non-family firms. In the term of return on equity, they show 3.11 per cent higher performance compared to their counterparts. We found a small difference in net profit margin. Family firms have a 0.83 per cent higher indicator compared to non-family firms. Interestingly, our difference-in-differences estimates do not show any impact of tax cut on SMEs in a short-run. Overall, our results show outperformance of family businesses in comparison to their counterparts and suggest that family firms are efficient organizational structure.

Keywords: Family business; family firm; financial performance; Tax cut policy effect; SMEs (search for similar items in EconPapers)
JEL-codes: M00 (search for similar items in EconPapers)
Date: 2020
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