Abstract
The empirical evidence of family business phenomenon in terms of employment outcomes is contradictory highlighting the micro–macro gap in the existing research. To address this contradiction, our study disentangles the role of context in family firms’ employment outcomes. To do so, we conduct a systematic literature review of 67 articles focusing on three employment-related outcomes—namely, growth, downsizing, and quality of labour—published in peer-reviewed journals from 1980 to 2020. Based on a two-by-two framework to classify this extant research, we unpack what we know about family firms and employment outcomes and where we can go from here. We highlight three main findings. First, current research is context-less since has mainly focused on the firm level in one context (i.e., region or country) and there is a lack of studies comparing family firms’ employment outcomes in different contexts and explicitly measuring the effects of contextual dimensions on family firms’ employment outcomes. This context-less approach could explain the conflicting results and lack of theoretical predictability about the family effect on employment across contexts. Second, the lack of understanding of the context in which family firms dwell highlights the need for future research to focus on context by theorizing about employment outcomes—that is, measuring context and its interactions with family- and job-related variables. Third, there is a need to further explore, analyse, and theorize on the aggregate effect of family firms on employment outcomes at different level of analysis (e.g., local, regional, and national).
Highlights
Recent decades have witnessed a surge of anecdotal stories and fact-based news (e.g., Schwartz 2020) showing the special commitment of family firms to their stakeholders, and toward their employees
We carried out a systematic literature review of 67 published papers in peer-reviewed journal from 1980 to 2020, and developed a framework to classify, analyse, and interpret current knowledge by incorporating three different approaches to contextualize the family firm phenomenon combining two different levels of analysis
Our approach enabled us to map what we know about family business and context in terms of employment outcomes, and what future research areas could be explored further
Summary
Recent decades have witnessed a surge of anecdotal stories and fact-based news (e.g., Schwartz 2020) showing the special commitment of family firms to their stakeholders, and toward their employees. While at the firm level, most empirical research has found that family firms are able to grow in terms of employment (Becchetti and Trovato 2002) and downsize less during economic crises (Lee 2006), at the aggregate level, family firms are related to less developed regions (Chang et al 2008) and to economic entrenchment based on political rent seeking as an impediment of economic growth (Morck and Yeung 2004) This contradiction brings to the fore the micro–macro gap in the family business phenomenon in terms of employment outcomes. We propose that context may help shed new light on why, when, and where the dark or bright sides of family firms emerge because context can boost or hinder (Johns2006) the family’s influence on employment outcomes In dealing with this gap, we follow Gomez-Mejia et al (2020) and James et al (2020) to argue that context has been overlooked across levels of analysis when explaining the phenomenon of employment outcomes within family business research.
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