Roots to Grow: Family Firms and Local Embeddedness in Rural and Urban Contexts

Abstract

This paper has been peer-reviewed but does not include the final publisher proof-corrections or journal pagination.

Family Business Growth Around the World

“…Family firms also invest more in human capital in the form of union relations, employee involvement and protection, retirement benefits, cash profit sharing, health and safety than non-family firms (Kang & Kim, 2019;Sanchez-Bueno, Muñoz-Bullón, & Galan, 2019). Moreover, they are known for investing in superior relationships with clients, suppliers and community (Baù, Chirico, Pittino, Backman, & Klaesson, 2018;Lamb & Butler, 2016;Le Breton-Miller et al, 2010). Thus, we argue that many family firms, thanks to their long-term orientation regarding superior innovation-and employee-related investments, are more likely to achieve a higher growth rate than their non-family counterparts.…”

Entrepreneurial families in business across generations, contexts and cultures

“…In the second level, a meso-context has been explored to a lesser extent (Stough et al, 2015 (Baù et al, 2019;Karlsson, 2018), for family engagement in collective entrepreneurial activities (Hadjielias and Poutziouris, 2015), and for the particular case of family-run start-ups (Bird and Wennberg, 2014), as well as the importance of industrial districts (Cucculelli and Storai, 2015). The third level, the macro-context, identifies economic, social, and cultural patterns that condition the economic activities of a family in business across generations (Gupta and Levenburg, 2010;Levenburg and Gupta, 2012), such as transgenerational entrepreneurship (Basco et al, 2018).…”

Does Increased Generational Involvement Foster Business Growth? The Moderating Roles of Family Involvement in Ownership and Management

“…Among other factors, growth is dependent on a firm's strategy (e.g., Baum et al ., 2001; Davidsson & Wiklund, 2013; Geyer, 2016) as it can be interpreted as a strategic goal set at the top management level (Greve, 2008). This situation is especially valid in the context of family firms (Baù et al ., 2019), which rely heavily on internal financing and, therefore, need to carefully plan business growth goals and processes as these activities involve investments of resources that may place the business at risk. According to Hamelin (2013), family firms are prone to limiting firms' growth by adopting conservative growth behavior that reduces placing the family wealth at risk (Zellweger & Sieger, 2012).…”

“…‘They find that next‐generation family firms invest less in capital equipment and R&D and exploit fewer new technologies or markets, leading to slower growth compared with founder‐controlled firms’ (Molly et al ., 2011, p.707). However, according to other studies, specific family‐based resources allow a family firm to generate a competitive advantage over non‐family firms such that higher growth can be expected in family firms (e.g., Baù et al ., 2019; Sirmon & Hitt, 2003). Thus, family involvement in ownership or management has the potential to increase business growth.…”

“…In fact, some prerequisites of growth, such as the participation of external investors or the reliance on equity funding or debt financing (Chrisman & Patel, 2012), are likely to diminish the capacity of the family to exert control over the business (Gómez‐Mejía et al ., 2007). On the other hand, the long‐term orientation and specific resources of family firms compared to those of their non‐family counterparts have been suggested to positively affect firm growth (e.g., Baù et al ., 2019; Sirmon & Hitt, 2003).…”