Cheng Chen, Claudia Steinwender, 30 April 2019

Firms around the world are facing increased import competition, especially from low-wage countries like China, but the effect on the productivity of impacted firms remains unclear. Using data from Spain, this column studies how firms under different types of management respond to an increase in competition, and shows that less-productive firms that are both family owned and managed see the greatest improvement in productivity. Their managers care more about the long-term survival of their firm, prompting additional effort when faced with an increased bankruptcy risk.

Andrew Ellul, Marco Pagano, Fabiano Schivardi, 17 June 2016

Most countries feature some form of government-provided unemployment insurance, but there is an alternative provider of insurance for employees – the firm they work for. This column asks whether the provision of implicit insurance by family firms in particular to employees is a substitute for the provision of explicit insurance by governments. Family firms stabilise employment more than non-family firms, and their insurance provision is greater when the insurance provided by the public sector is less generous.

Oriana Bandiera, Andrea Prat, Raffaella Sadun, 12 February 2015

The hypothesis that family firms are good for growth has come under scrutiny in recent years. This paper presents novel evidence on fundamental differences in behaviour between family and professional CEOs. Family managers tend to work at least 9% less than non-family ones, which is driven by their preferences for leisure and work. Family CEOs are typically wealthier and thus increase their consumption of leisure, which is a normal good. However, this behaviour may have adverse effects on family owned firms since hours worked by CEOs are strongly related with productivity. Given the ubiquity of family-run firms, this can impact the entire economy.

Andrew Ellul, Marco Pagano, Fausto Panunzi, 03 October 2008

The authors of DP6977 investigate the effect of inheritance law on investment in family firms in 32 countries.

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