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Performance of family firms: A literature review and guidance for future research

Thomas Zellweger & Joseph H. Astrachan

abstract Numerous studies have investigated the impact of family influence on the performance of a firm. The most-cited scholarly article in this respect was published by Anderson and Reeb (2003) who found that publicly quoted family firms outperformed their nonfamily counterparts. Since publication of Anderson and Reeb’s (2003) article, comparable studies have been replicated throughout the world. Miller and Le Breton-Miller (2005) wrote a comprehensive overview of existing family business performance studies.
The research does not present a monolithic picture. The link between performance and family influence is greatly affected by the definition of the family firm employed in the research, the precise question analyzed by the researchers, and the definition of performance considered. Whereas the literature provided by Miller and Le Breton-Miller (2005, 14) includes studies that show superior performance of family firms along various performance dimensions, other studies draw a less positive picture of family firm performance. For example Bennedsen, Nielsen, Perez-Gonzalez and Wolfenzon (2006) find that overall, non-family CEOs provide valuable services to the organizations they head, thereby supporting the case that family managed firms have lower performance than non-family firms. In a similar vein, Perez-Gonzalez (2006) finds that firms where incoming CEOs are related to the departing CEO, to a founder, or to a large shareholder by either blood or marriage undergo large declines in operating returns on assets and market-to-book ratios, relative to firms that promote unrelated CEOs. Furthermore, Bloom and van Reenen (2006) find that that poor management practices are more prevalent when family-owned firms pass management control down to the eldest sons (primo geniture).
Because the available research is ambiguous as to whether family influence is beneficial or detrimental to firm performance, we need to further investigate in what ways family as an organizational variable affects firm performance.
   
type journal paper
   
keywords Family Firms, Performance
   
project Value and Performance in Family Firms
language Deutsch
kind of paper journal article
date of appearance 19-6-2008
journal Zeitschrift für KMU und Entrepreneurship
publisher Duncker & Humblot
volume of journal 56
number of issue 2
page(s) 83-108
review double-blind review
   
citation Zellweger, T., & Astrachan, J. H. (2008). Performance of family firms: A literature review and guidance for future research. Zeitschrift für KMU und Entrepreneurship, 56(2), 83-108.