Impact of family involvement on productivity

Francesco Barbera, Ken Moores

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Abstract

Motivated by a lack of consensus in the current literature, this paper aims to shed light on whether family firms are more or less productive than non-family firms. As a first step, this paper links existing family business research to the theoretical notion that family involvement has an influence on the factors of production from a productivity standpoint. Secondly, utilising a Cobb-Douglas framework, we provide empirical evidence that family labour and capital indeed yield diverse output contributions relative to 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 once 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
Title of host publicationFamily Business Australia 2011 Research & Education Symposium
Place of PublicationMelbourne
PublisherFamily Business Australia
Pages1-15
Number of pages15
Publication statusPublished - 2011
EventFamily Business Australia 2011 Research & Education Symposium - Perth, Australia
Duration: 31 Aug 2011 → …
http://www.fambiz.org.au/professional-development/national-conference/

Conference

ConferenceFamily Business Australia 2011 Research & Education Symposium
CountryAustralia
CityPerth
Period31/08/11 → …
Internet address

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Barbera, F., & Moores, K. (2011). Impact of family involvement on productivity. In Family Business Australia 2011 Research & Education Symposium (pp. 1-15). Melbourne: Family Business Australia.