Family co-occurrence and firm productivity

Abstract

Our chapter examines the effects of family co-occurrence (i.e., the presence of familial relationships inside a firm, including between co-workers and between employees and the owner) on firm productivity. Analyzing a set of Swedish firms over the 1995–2012 period, we find a positive and significant relationship between family co-occurrence and firm productivity. This positive relationship is particularly evident in smaller regions characterized by a more specialized industry mix. When looking at the specific case of family co-occurrence involving familial relationships with firm owners, we find that the positive productivity effect of familial relationships with firm owners varies depending on the type of family tie. While familial co-occurrence involving partners or spouses is positive and abates the negative effects of employees having very similar or very diverse skills (e.g., based on education), family co-occurrence involving siblings is pretty much non-existent. In sum, our findings suggest that family co-occurrence in workplaces does influence productivity and that the positive or negative impact of familial relationships on productivity is contingent on the type of family tie, the family members’ skills, and the regional context.