A meta-analytic examination of the relationship between family firm generational involvement and performance

Abstract

PurposeThe purpose of this paper is to examine the relationship between family firm generational involvement and performance. Although researchers have studied this relationship extensively, a complete understanding of its true magnitude and sign is still lacking.Design/methodology/approachThis meta-analysis sheds new light on this relationship, integrating the findings of 43 studies with 51 independent samples and 18,802 family firms.FindingsThe results reveal a small and negative relationship indicating that later-generation family firms perform worse compared to first-generation ones. The authors also show that the relationship is stronger for younger than older and for private than public firms. Finally, the measurements of both variables influence the relationship yielding critical research implications.Research limitations/implicationsThis study suggests that future researchers examining the effects of generational involvement on family firm performance should conduct their analysis using multiple measures of both variables to ensure the accuracy of their results. It also highlights the need of family business scholars to converge to the use of a universal family firm definition, as findings differ significantly in strength and direction depending on which definition is used.Practical implicationsFrom a practitioners’ perspective, the findings imply that owners of young and private family firms should consider professionalizing and adopting a balanced top management team composition consisting of both family and non-family members as a way to mitigate the negative effects of “familiness” on performance.Originality/valueThis study empirically demonstrates the importance of adopting a generational perspective when examining differences in family firm performance.