The Distribution of Family Firm Performance Heterogeneity: Understanding Power Law Distributions

Emma Su (), Daniel T. Holt () and Jeffrey M. Pollack ()
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Emma Su: Mississippi State University
Daniel T. Holt: Mississippi State University
Jeffrey M. Pollack: North Carolina State University

Chapter 15 in The Palgrave Handbook of Heterogeneity among Family Firms, 2019, pp 407-429 from Springer

Abstract: Abstract We examine an underlying assumption that is implicitly suggested in family business scholarship that the heterogeneity among family firm financial performance follows a normal distribution. Instead, performance heterogeneity may be represented more accurately by alternative distributions. In the present work, we substantiate this premise through the examination of three samples, and we argue that an examination of heterogeneity through this lens presents important research opportunities. This may help researchers better understand why recent meta-analyses, aggregating the relationship between family involvement and firm financial performance, indicate that the family’s involvement, at best, marginally influences financial performance. Methodologically, this perspective introduces a set of techniques that can offer novel insights into our understanding of important family firm questions.

Keywords: Financial performance; Performance heterogeneity; Normal distribution; Power law distribution (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/978-3-319-77676-7_15

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