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Assessing family firm performance using frontier analysis techniques: Evidence from Italian manufacturing industries

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  • Erbetta, Fabrizio
  • Menozzi, Anna
  • Corbetta, Guido
  • Fraquelli, Giovanni

Abstract

This article provides new evidence on the performance differentials between family and non-family firms. Unlike previous studies based on accounting or market performance measures we used a flexible “data oriented” approach, known as Data Envelopment Analysis (DEA), to evaluate the performance of a set of peer entities. We argue that the use of DEA is consistent with the rationale of benchmarking and, as such, with the theoretical foundations of agency framework, which is often evoked in studies on family business. Consistently with prevailing literature, we find evidence of higher profitability of family firms. However, advancing with respect to the existing literature, we reveal a systematic lower efficiency and a significant tendency to overuse labour and capital for family businesses.

Suggested Citation

  • Erbetta, Fabrizio & Menozzi, Anna & Corbetta, Guido & Fraquelli, Giovanni, 2013. "Assessing family firm performance using frontier analysis techniques: Evidence from Italian manufacturing industries," Journal of Family Business Strategy, Elsevier, vol. 4(2), pages 106-117.
    • Handle: RePEc:eee:fambus:v:4:y:2013:i:2:p:106-117
    DOI: 10.1016/j.jfbs.2013.04.001
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