Disentangling family firm heterogeneity: Evidence from a cross-country analysis

Abstract

The existing typologies, classifications that identify types of family firms based on specific characteristics, aim to enhance our understanding of the heterogeneity of family businesses. However, these typologies fall short in thoroughly exploring and predicting behavioural and performance consequences associated with being categorized within specific classifications. Furthermore, the majority of the existing analyses have been empirically tested in one single country. To address these two research gaps, we use a sample of 814 small- and medium-sized family firms operating in 21 countries, collected by the STEP Project Global Consortium. This sample is employed to classify family firms based on their corporate governance similarities and explore their behavioural and performance patterns. Building on the principles of the configurative approach, we find that each of the four family firm configuration—group of family firms with related corporate governance mechanisms—has a unique yet similar combination of patterns in terms of transgenerational entrepreneurship practices, non-economic goals, and firm performance. Additionally, expanding on the isomorphic effect, we find evidence indicating that certain world macroregions exhibit a greater propensity for specific corporate governance configurations compared to others.

Growth and Performance: Business Model Innovation in Family Firms

“…Assuming the above, as stated by Chrisman et al [46], yet a tailored economic theory for family businesses remains elusive, and general economic models fall short as they overlook unique elements of family firms, notably their pursuit of socio-emotional wealth. In fact, there is no dominant consensus on the classification of family firms, and although multiple categories have been established in order to classify and understand the behavior of family businesses, these same categories fail to explain aspects related to strategy and performance in family firms [47].…”