Labor investment decisions in family firms: the under-firing behavior

Decisiones de inversión laboral en empresas familiares: el comportamiento de subdespido

Sabrina Khemiri (), Assil Guizani, Faten Lakhal () and Emna Brahem
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Sabrina Khemiri: LITEM - Laboratoire en Innovation, Technologies, Economie et Management (EA 7363) - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris], IMT-BS - DEFI - Département Data analytics, Économie et Finances - IMT - Institut Mines-Télécom [Paris] - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris]
Assil Guizani: EDC - EDC Paris Business School, OCRE - Observatoire et Centre de Recherche en Entrepreneuriat - EDC - EDC Paris Business School
Faten Lakhal: PULV - Pôle Universitaire Léonard de Vinci
Emna Brahem: UEVE - Université d'Évry-Val-d'Essonne, Institut Supérieur de Gestion Sousse, LITEM - Laboratoire en Innovation, Technologies, Economie et Management (EA 7363) - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris]

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Abstract: This study investigates labor investment inefficiency in family firms from a specific socioemotional wealth (SEW) perspective, particularly under-firing behavior. Family firms differ from their non-family counterparts and are more concerned about their reputation and emotional goals apart from financial objectives, leading them to make inadequate labor investment decisions. Based on a sample of French-listed firms in the SBF 120 index from 2005 to 2021, the results support the SEW perspective and show that family firms and their involvement in management lead to inefficient labor investment decisions, specifically through the under-firing problem. Additional analyses show that the over-investment problem is mitigated in family firms operating in a highly competitive environment. Moreover, inefficient labor investments are more pronounced in socially responsible family firms.

Keywords: Labor investment inefficiency; Family firms; Over-investment; Under-firing; Product market competition; Competencia en el mercado de productos; Subdespido; Sobreinversión; Empresas familiares; Ineficiencia en la inversión laboral; Sous-licenciement; Concurrence sur le marché des produits; Surinvestissement; Entreprises familiales; Inefficience des investissements en main-d'œuvre (search for similar items in EconPapers)
Date: 2025
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Published in Management international = International management = Gestión internacional, inPress, pp.1-26. ⟨10.59876/a-71ex-a3z0⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05312037

DOI: 10.59876/a-71ex-a3z0

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