Family Firms and the Great Recession: Out of Sight, Out of Mind?

Leandro D’Aurizio and Livio Romano ()

No ECO2011/28, Economics Working Papers from European University Institute

Abstract: The purpose of this paper is to study how family firms, compared to widely-held companies, reacted to the 2008 economic crisis in terms of employment adjustments. By using a difference-in-difference approach, we provide empirical evidence that di- vergent paths of adjustment between family and non-family firms exist, with family firms systematically preferring to safeguard workplaces close to the firm's headquarters, compared to other plants. We offer a new theoretical framework consistent with these findings, that we define the social recognition motive, based on the psychological rela- tion linking the family owner with his community of reference. We investigate possible alternative explanations for the results, most of whom can be ruled out in our setting. Finally, we test more directly for the validity of the social recognition theory, finding encouraging results in line with the predictions.

Keywords: Family Firms; Great Recession; Employment; Social Pressure (search for similar items in EconPapers)
JEL-codes: C81 D22 J60 M14 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-bec
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://cadmus.eui.eu/bitstream/handle/1814/18356/ECO_2011_28.pdf?sequence=3 main text

Related works:
Working Paper: Family firms and the Great Recession: out of sight, out of mind? (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eui:euiwps:eco2011/28

Access Statistics for this paper

More papers in Economics Working Papers from European University Institute Badia Fiesolana, Via dei Roccettini, 9, 50014 San Domenico di Fiesole (FI) Italy. Contact information at EDIRC.
Bibliographic data for series maintained by Cécile Brière ().