۱- Introduction

۲- Conceptual framework: defining family firms

۳- Data and identification of family firms

۴- The economic contribution of family firms

۵- The characteristics of family firms

۶- Concluding discussion

References

Abstract

Family firms are often considered characteristically different from non-family firms. However, our understanding of family firms suffers from an inability to identify them in total population data; information is rarely available regarding owners, their kinship, and their involvement in firm governance. We present a method for identifying domiciled family firms using register data; this method offers greater accuracy than previous methods. We apply this method to Swedish data concerning firm ownership, governance, and kinship from 2004 to 2010. We find that the family firm is a significant organizational form, contributing over one third of all employment and gross domestic product (GDP). Family firms are common in most industries and range in size. Furthermore, we find that, compared to private non-family firms, family firms have fewer total assets, employment, and sales and carry higher solidity, although family firms are more profitable. These differences diminish with firm size. We conclude that the term “family firm” includes a large variety of firms, and we call for increased attention to their heterogeneity.

Introduction

Family business has become a substantial field of research over the past two decades (Bird et al. 2002; Colli 2003; Sharma 2004; Poutziouris et al. 2006; Casillas and Acedo 2007; Benavides-Velasco et al. 2013; GarciaCastro and Aguilera 2014; Xi et al. 2015). Empirical studies indicate that concentration of ownership within a family is common among listed firms and predominant among unlisted firms; additionally, family firms contribute substantially to aggregate employment and income (La Porta et al. 1999; Faccio and Lang 2002; Astrachan and Shanker 2003; Morck et al. 2005; Bertrand and Schoar 2006; Bjuggren et al. 2011). Family businesses have also received increased political attention; they are considered the backbone of private industry and a key target for policies aimed at increased employment and economic growth. Consequently, many policies designed to encourage the establishment and growth of family firms have been proposed in both Europe and the USA (European Commission 1994, 2006, 2009). However, some researchers have argued that family businesses are an inefficient way to organize business activities because they put social goals, such as control and nepotism, before economic goals, such as profit and growth. The debate over the efficiency of family ownership is longstanding and remains unsettled (Landes 1949; Chandler 1990; Dyer 2006; Bjuggren 2013; Miller and Le Breton-Miller 2015; Evert et al. 2016). Given the prevalence of family firms, the theoretical and empirical ambiguity regarding their “successfulness” and the political attention they receive, it is crucial to further investigate their economic contributions and the impact of economic policy on family firms’ performance. Both tasks require statistical records of high quality. However, administrative registers generally do not recognize ownership or kinship. Until recently, this fact has made it nearly impossible to use total population data to study family firms, and most family firms have therefore been excluded from research.