Family Firms and Negative Social Capital: A Property Rights Theory Approach

Abstract

Unlike non-family firms, family firms are highly affected by the dynamics of the family. Furthermore, there are differences between minority family firms and non-minority family firms. These differences between the operational performance of non-minority family firms and minority family firms’ exist due to the family’s tendency to behave collectivistic versus individualistic when extending property rights. Hence, utilizing the property rights theory, this article explains how differences in size, longevity, and financial wealth between non-minority family firms and minority family firms may be better understood by examining the family culture.