Family Firms Survival in an Economic Downturn: The Generational Stage and Collaborative Intensity

Abstract

This study examines the complex relationship between family governance and firm survival in the context of an economic downturn, by focusing on the influence of two key factors: the generational stage and collaborative intensity. For a proper test of these relationships, we performed Cox survival analyses over a sample of 269 SMEs followed from 2005 until 2014. The results show that while family firms survive more overall, their performance suffers more during a period of economic downturn, although they retain higher survival odds. The results further suggest a higher risk for first-generation family firms, thus pointing to the effect of the liabilities of newness. Finally, the findings indicate that, in a period of economic stability, those family firms with higher collaborative intensity with private firms exhibit a higher likelihood of survival. Instead, the results do not show benefits of a higher collaborative intensity with public entities, or that developed during an economic downturn, possibly due to the higher risks of partnerships which may set-off the potential benefits. The paper concludes with a discussion about academic, managerial and public policy implications.