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

Author

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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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    References listed on IDEAS

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    1. repec:eee:phsmap:v:486:y:2017:i:c:p:183-191 is not listed on IDEAS
    2. Lahmiri, Salim, 2017. "On fractality and chaos in Moroccan family business stock returns and volatility," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 473(C), pages 29-39.
    3. repec:eee:fambus:v:8:y:2017:i:2:p:99-108 is not listed on IDEAS
    4. Miralles-Marcelo, José Luis & Miralles-Quirós, Maria del Mar & Lisboa, Inês, 2014. "The impact of family control on firm performance: Evidence from Portugal and Spain," Journal of Family Business Strategy, Elsevier, vol. 5(2), pages 156-168.
    5. Dimitrios Giokas & Nicolaos Eriotis & Ioannis Dokas, 2015. "Efficiency and productivity of the food and beverage listed firms in the pre-recession and recessionary periods in Greece," Applied Economics, Taylor & Francis Journals, vol. 47(19), pages 1927-1941, April.

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