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Are Family Firms Good Employers?

Jeroen Neckebrouck UGent, William Schulze and Thomas Zellweger (2017) Academy of Management Journal.
abstract
Family firms employ about 60 percent of the global workforce. While it is widely assumed that they are good employers, data about their conduct is mixed. In this study, we extend stewardship and agency theories to test competing propositions about the impact of family on employment practices using data from 14,961 private Belgian firms over a 19-year period. Higher investments, lower dividend payout, and higher risk tolerance indicate that family firms are better financial stewards of their companies than nonfamily firms. However, family firms are worse organizational stewards than nonfamily firms: They offer lower compensation, invest less in employee training, and exhibit higher voluntary turnover and lower labor productivity. Further, and contrary to earlier research, we find that financial practices in private family firms do not change over time, and that the deleterious influence of family on employment practices rises with both firm age and with heightened family involvement. Together, our findings suggest that a more nuanced understanding of stewardship and agency theory is needed to understand the impact of family on the governance of private firms.
Please use this url to cite or link to this publication:
author
organization
year
type
journalArticle (original)
publication status
in press
subject
keyword
family firms, employers
journal title
Academy of Management Journal
publisher
The Academy of Management
ISSN
0001-4273
1948-0989
DOI
10.5465/amj.2016.0765
language
English
UGent publication?
yes
classification
A1
id
8523897
handle
http://hdl.handle.net/1854/LU-8523897
date created
2017-06-15 11:54:19
date last changed
2017-06-19 10:59:39
@article{8523897,
  abstract     = {Family firms employ about 60 percent of the global workforce. While it is widely assumed that they are good employers, data about their conduct is mixed. In this study, we extend stewardship and agency theories to test competing propositions about the impact of family on employment practices using data from 14,961 private Belgian firms over a 19-year period. Higher investments, lower dividend payout, and higher risk tolerance indicate that family firms are better financial stewards of their companies than nonfamily firms. However, family firms are worse organizational stewards than nonfamily firms: They offer lower compensation, invest less in employee training, and exhibit higher voluntary turnover and lower labor productivity. Further, and contrary to earlier research, we find that financial practices in private family firms do not change over time, and that the deleterious influence of family on employment practices rises with both firm age and with heightened family involvement. Together, our findings suggest that a more nuanced understanding of stewardship and agency theory is needed to understand the impact of family on the governance of private firms. },
  author       = {Neckebrouck, Jeroen and Schulze, William and Zellweger, Thomas},
  issn         = {0001-4273},
  journal      = {Academy of Management Journal},
  keyword      = {family firms,employers},
  language     = {eng},
  publisher    = {The Academy of Management},
  title        = {Are Family Firms Good Employers?},
  url          = {http://dx.doi.org/10.5465/amj.2016.0765},
  year         = {2017},
}

Chicago
Neckebrouck, Jeroen, William Schulze, and Thomas Zellweger. 2017. “Are Family Firms Good Employers?” Academy of Management Journal.
APA
Neckebrouck, J., Schulze, W., & Zellweger, T. (2017). Are Family Firms Good Employers? Academy of Management Journal.
Vancouver
1.
Neckebrouck J, Schulze W, Zellweger T. Are Family Firms Good Employers? Academy of Management Journal. The Academy of Management; 2017;
MLA
Neckebrouck, Jeroen, William Schulze, and Thomas Zellweger. “Are Family Firms Good Employers?” Academy of Management Journal (2017): n. pag. Print.