Local Embeddedness and Rural-Urban Contexts for Business Growth in Family versus non-Family Firms

Abstract

The present study analyzes the nexus among business growth, ownership structure and a firm’s local embeddedness – i.e., the involvement in a geographically bound social structure – in rural and urban contexts. This work combines regional economics with studies on family business and firm growth and uses a coarsened matched sample of privately held Swedish firms for the 2004-2013 period. The findings indicate that family firms benefit more than non-family firms from local embeddedness to achieve higher levels of financial and employment growth and that this effect is more pronounced in rural areas. Research implications are shared in the concluding section.