How Do Family Firms Differ? A Meta-analysis



A research question that has recently risen to prominence in the strategy literature is whether publicly-listed family firms (FFs) underperform or outperform other types of public corporations. An unambiguous answer to this question is absent from the literature because both theoretical arguments and empirical evidence are inconclusive across studies. Through a combination of research synthesis and theory-extension efforts, we shed new light on this relationship in three ways. First, we answer this open question by providing a meta-analysis of the relationship between family control and performance among U.S. based firms, finding that the balance of evidence indicates that FFs outperform other types of public corporations. Second, we extend current theorizing by showing that FFs exhibit strategic patterns of behavior that differ from other public corporations, and that these patterns are a key driver of their superior performance. Third, we show that FF outperformance is not stable across first- and successor-generation-led firms. We also trace the source of this instability to intergenerational shifts in strategy and governance. Empirically, our study draws on a pooled database comprising 55 studies, 123 effect sizes, and 187,999 firm-year observations.
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Carolien Heintjes