Are family firms good employers?

Item Type Journal paper
Abstract Family firms employ about 60 percent of the global workforce. While it is widely assumed that they are good employers, data about their conduct is mixed. In this study, we extend stewardship and agency theories to test competing propositions about the impact of family on employment practices using data from 14,961 private Belgian firms over a 19-year period. Higher investments, lower dividend payout, and higher risk tolerance indicate that family firms are better financial stewards of their companies than nonfamily firms. However, family firms are worse organizational stewards than nonfamily firms: They offer lower compensation, invest less in employee training, and exhibit higher voluntary turnover and lower labor productivity. Further, and contrary to earlier research, we find that financial practices in private family firms do not change over time, and that the deleterious influence of family on employment practices rises with both firm age and with heightened family involvement. Together, our findings suggest that a more nuanced understanding of stewardship and agency theory is needed to understand the impact of family on the governance of private firms.
Authors Neckebrouck, Jeroen; Schulze, Bill & Zellweger, Thomas Markus
Journal or Publication Title Academy of Management Journal
Language English
Subjects business studies
HSG Classification contribution to scientific community
Refereed Yes
Date 20 April 2018
Publisher Academy of Management
Place of Publication Briarcliff Manor, NJ
Volume 61
Number 2
ISSN 0001-4273
ISSN-Digital 1948-0989
Publisher DOI
Depositing User Prof. Dr. Thomas Zellweger
Date Deposited 04 Jun 2017 18:59
Last Modified 20 Jul 2022 17:31


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Neckebrouck, Jeroen; Schulze, Bill & Zellweger, Thomas Markus (2018) Are family firms good employers? Academy of Management Journal, 61 (2). ISSN 0001-4273

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