How important is family involvement for small companies’ growth?
Journal of Small Business and Enterprise Development
ISSN: 1462-6004
Article publication date: 3 June 2020
Issue publication date: 11 August 2020
Abstract
Purpose
Our paper seeks to further understand how family involvement in management influences firm growth.
Design/methodology/approach
Using a sample of small high-tech firms, we classify three different types of firms: family firms managed by family-CEOs, family firms managed by non-family CEOs and non-family firms.
Findings
Consistent with our expectations, we show that firms managed by family-CEOs have less firm growth in comparison with the other two groups. When the family firm is managed by non-family CEOs, the presence of another family member in management positions has a negative impact on firm growth. Finally, we found that founder-led family firms have better firm growth than descendant-led family firms.
Research limitations/implications
Implications for the theory of family firms are discussed.
Originality/value
The value of the present study is to analyse in depth the heterogeneity of the family business trying to close the gap by exploring the effect of family involvement on small firm growth. Thus, we will find different behaviours of these family companies, depending on the family member’s presence in management positions.
Keywords
Acknowledgements
The authors acknowledge the support from the Spanish Ministry of Economy, Industry, and Competitiveness and the European Regional Development Fund (FEDER) through project ECO2017-86305-C4-4-R (AEI/FEDER, UE).
Citation
Garcés-Galdeano, L. and García-Olaverri, C. (2020), "How important is family involvement for small companies’ growth?", Journal of Small Business and Enterprise Development, Vol. 27 No. 4, pp. 531-554. https://doi.org/10.1108/JSBED-06-2019-0190
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited