Labour productivity in the Palestinian family industries

The family businesses represent the majority of the private sector in the Palestinian economy. It is known that the labour productivity is supposed to be higher in family businesses compared to non-family businesses due to direct supervision and other aspects. Therefore, the general purpose of this research is to discuss this issue in general and to compare labour productivity in the Palestinian family industries with non-family industries. The study used various indicators to measure labour productivity such as, sales value per employee, cost of labour to sales ratio, and cost of goods sold value per employee. The aim is to indicate whether the merits of family business are reflected in producing higher labour productivity as expressed by different outputs. The study found that the cost of labour in family business industries is less than in non-family industries, but the productivity is much higher in the non-family industries compared to family industries as expressed by the sales value per employee. In addition the difference between labour productivity of public corporations (non-family) and family industries is existed but is not decisive; and mainly it is in favour to non-family industries, while there are no significant differences among the family business groups whether it is food or non-food industries.