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The Survival of Family Firms: The Importance of Control and Family Ties

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  • F. Lotti
  • E. Santarelli

Abstract

The aim of this paper is to analyze the survival patterns of a group of family firms which have already spent at least twenty-five years in the market. To this end, we use the Kaplan-Meier product limit estimator supplemented with qualitative information gathered by direct observation and discussions with entrepreneurs. The main findings of the paper are that small family firms which have reached their thirtieth year in the market face a very high risk of sudden exit, increasing with firm age. Further control carried out by means of interviews with entrepreneurs identifies problems connected with succession as one of the main causes of the decision to close down.

Suggested Citation

  • F. Lotti & E. Santarelli, 2002. "The Survival of Family Firms: The Importance of Control and Family Ties," Working Papers 461, Dipartimento Scienze Economiche, Universita' di Bologna.
  • Handle: RePEc:bol:bodewp:461
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    References listed on IDEAS

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    Cited by:

    1. Richard I.D. Harris & Qian Cher Li, "undated". "Export-market dynamics and the probability of firm closure: Evidence for the UK," Working Papers 2008_17, Business School - Economics, University of Glasgow.
    2. Roberta Piergiovanni, 2010. "Gibrat's Law in the “Third Italy”: Firm Growth in the Veneto Region," Growth and Change, Wiley Blackwell, vol. 41(1), pages 28-58, March.
    3. Basco, Rodrigo & Suwala, Lech, 2020. "Spatial familiness: a bridge between family business and economic geography," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 185-212.
    4. Nzinga Broussard & Ralph Chami & Gregory Hess, 2015. "(Why) Do self-employed parents have more children?," Review of Economics of the Household, Springer, vol. 13(2), pages 297-321, June.
    5. Aleid E. Brouwer, 2003. "An empirical study on the relationship between the spatial environment and the survival of old firms in the Netherlands," ERSA conference papers ersa03p108, European Regional Science Association.
    6. Dawn DeTienne & Melissa Cardon, 2012. "Impact of founder experience on exit intentions," Small Business Economics, Springer, vol. 38(4), pages 351-374, May.
    7. Brouwer Aleid & Pellenbarg Pieter, 2011. "The Importance of Place in Corporate Identity an Investigation on the Presence of Old Dutch Firms on the Internet," European Spatial Research and Policy, Sciendo, vol. 18(2), pages 79-94, November.
    8. Cucculelli, Marco & Micucci, Giacinto, 2008. "Family succession and firm performance: Evidence from Italian family firms," Journal of Corporate Finance, Elsevier, vol. 14(1), pages 17-31, February.
    9. Boris Rumanko & Zuzana Lušňáková & Monika Moravanská & Mária Šajbidorová, 2021. "Succession as a Risk Process in the Survival of a Family Business—Case of Slovakia," JRFM, MDPI, vol. 14(10), pages 1-20, September.
    10. Jellal, Mohamed, 2009. "Family Capitalism Corporate Governance Theory," MPRA Paper 17886, University Library of Munich, Germany.
    11. Rossella Leopizzi & Simone Pizzi & Fabrizio D'Addario, 2021. "The Relationship among Family Business, Corporate Governance, and Firm Performance: An Empirical Assessment in the Tourism Sector," Administrative Sciences, MDPI, vol. 11(1), pages 1-12, January.

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    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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