Ownership, productivity and firms' life-cycle

Abstract

Empirical evidence on productivity differences between family owned and nonfamily owned firms is still sparse and reveals conflicting results. Unlike previous studies, we analyse the effect of the firm's life cycle on productivity using a large sample of nonlisted firms. Furthermore, we consider a model with heterogeneity of inputs between the two types of firms and addressing possible endogeneity problems. We conclude that there are no significant differences in productivity between family and non-family firms, for both startup/growth and mature stages of life cycle. Furthermore, labour seems to be the main determinant of family firms' productivity, which is especially evident for firms in the mature stage.