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

Francesco Barbera, Ken Moores

Research output: Contribution to journalArticleResearchpeer-review

27 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)953-976
Number of pages24
JournalSmall Business Economics
Volume40
Issue number4
Early online date19 Nov 2011
DOIs
Publication statusPublished - May 2013

Fingerprint

Firm ownership
Firm productivity
Small and medium-sized enterprises
Labor
Business research
Family business
Factors of production
Productivity
Cobb-Douglas
Production function
Total factor productivity
Family firms
Empirical evidence
Family involvement

Cite this

Barbera, Francesco ; Moores, Ken. / Firm ownership and productivity: A study of family and non-family SMEs. In: Small Business Economics. 2013 ; Vol. 40, No. 4. pp. 953-976.
@article{5fb8f13c447a47da925c9844782ef199,
title = "Firm ownership and productivity: A study of family and non-family SMEs",
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.",
author = "Francesco Barbera and Ken Moores",
year = "2013",
month = "5",
doi = "10.1007/s11187-011-9405-9",
language = "English",
volume = "40",
pages = "953--976",
journal = "Small Business Economics",
issn = "0921-898X",
publisher = "Springer",
number = "4",

}

Firm ownership and productivity: A study of family and non-family SMEs. / Barbera, Francesco; Moores, Ken.

In: Small Business Economics, Vol. 40, No. 4, 05.2013, p. 953-976.

Research output: Contribution to journalArticleResearchpeer-review

TY - JOUR

T1 - Firm ownership and productivity: A study of family and non-family SMEs

AU - Barbera, Francesco

AU - Moores, Ken

PY - 2013/5

Y1 - 2013/5

N2 - 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.

AB - 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.

UR - http://www.scopus.com/inward/record.url?scp=84876690210&partnerID=8YFLogxK

U2 - 10.1007/s11187-011-9405-9

DO - 10.1007/s11187-011-9405-9

M3 - Article

VL - 40

SP - 953

EP - 976

JO - Small Business Economics

JF - Small Business Economics

SN - 0921-898X

IS - 4

ER -