Socioemotional Wealth and Corporate Social Performance: Do Family Firms employ larger Workforces?

Abstract

This paper compares the employee-related social performance of family and nonfamily companies, using a sample of the largest private and public 432 Latin American firms. It was found that family controlled firms exhibit a higher employee-related corporate social performance regarding size of employed workforce than nonfamily firms. A model combining the motivation for socioemotional wealth preservation with the stakeholder framework for analysing and evaluating corporate social performance helps to explain the influence of family control on the firm’s social outcomes. This research also finds that 44% of the largest Latin American companies are family firms and adds to studies evidencing the ubiquity of family business.