Abstract
We studied the effect of family control on the characteristics of small- and medium-sized enterprises located in the Northern Italian province of Bergamo. The analysis included aspects such as demographic characteristics, cost and productivity of labour, financial ratios, and the performance of 745 SMEs. Family-controlled firms emerged as a predominant organizational type in almost all the industries and a number of relevant differences were found between family-controlled and non-family firms. In sum, family-controlled firms in our sample outperformed their non-family counterparts in terms of return on sales, return on equity and return on assets.
Highlights
Very many firms around the world are run by families [1]
This paper provides exploratory results from an ongoing research project developed at the Center for Young and Family Enterprise (CYFE) at the University of Bergamo, whose aim is to build a permanent observatory on small‐ and medium‐sized family firms located in the province of www.intechopen.com
Our analysis pointed to several differences between family‐controlled firms and non‐family firms
Summary
Very many firms around the world are run by families [1]. In the U.S, research has shown that family businesses account for 90‐98% of all businesses, employing over half of the workforce, creating over half of all new jobs and generating 12‐49% of the national GDP, according to different definitions [2]. La Porta et al [3] proved that on average families control respectively one third and 45% of the large‐ and medium‐sized publicly traded firms around the world. This evidence sheds light on the important role families play in organizations, as demonstrated by the fast growth of the literature on family firms [4]. Several studies report that family businesses have different characteristics from non‐family firms in terms of goals (e.g., [8]), financing and investment decisions (e.g., [9,10,11]), sources of competitive advantage [12], innovation investments [13] and performance (e.g., [14,15,16]). Most of the studies focus on big firms, mostly because this is where data are available and information about the family effect on small and medium enterprises’ (SMEs) characteristics appears still to be underdeveloped [17]
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