Long-term family firm survival and growth considering owning family adaptive capacity and federal disaster assistance receipt

Abstract

Natural disasters are expected to increase in number and severity. This study initiates a stream of research on effective family business strategies to address the threat of natural disasters to long-term survival and growth of family firms. The purpose of this study was to analyze the mitigating effects of the owning family's adaptive capacity and federal disaster assistance on long-term survival and growth of family firms. Data for 282 family firms in the National Family Business Panel were merged with data on federal disaster assistance from the Public Entity Risk Institute. Indicators of family adaptive capacity had both more numerous significant effects and larger effects on survival and growth than did business characteristics. Experiencing fewer negative family stressors meant a greater likelihood of remaining open from 1997 to 2007 and increasing revenue from 2000 to 2007. Consistent family leadership in times of stability and change and resource focused-management practices decreased the likelihood of survival. Family firms benefitted indirectly from federal disaster assistance to the county and directly from federal disaster assistance when a natural disaster hit their own family firms.