Rate of Failure of Czech Family Firms

Abstract

Family business is becoming a promising area of research in post-socialist countries, including the\rCzech Republic. Stability belongs to frequently cited properties of family firms. The goal of this\rarticle is to test the hypothesis whether family firms tend to have a lower rate of failure than their non-family counterparts. Using a sample of 1148 family and 5972 non-family firms in the Czech Republic, we find that there is no significant relationship between family involvement and rate of failure. A possible greater stability of family businesses is not necessarily linked with a lower rate of\rbankruptcy. We also discuss possible reasons and policy implications.