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The Rise and Fall of Family Firms in the Process of Development

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  • Carillo, Maria Rosaria
  • Lombardo, Vincenzo
  • Zazzaro, Alberto

Abstract

This paper explores the causes and the consequences of the evolution of family firms in the growth process. The theory suggests that in early stages of development, valuable family specific human capital stimulated the productivity of family firms and the development process. However, in light of the rise in the importance of managerial talents for firms' productivity in later stages, family firms generated a misallocation of managerial talents, curbing productivity and economic growth. Evidence supports the dual impact of family firms in the development process and the role of socio-cultural characteristics in observed variations in the productivity of family firms.

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  • Carillo, Maria Rosaria & Lombardo, Vincenzo & Zazzaro, Alberto, 2019. "The Rise and Fall of Family Firms in the Process of Development," MPRA Paper 91222, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:91222
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    More about this item

    Keywords

    Family firms; economic development and growth; culture and social structure; allocation of talents; industrialization;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • Z1 - Other Special Topics - - Cultural Economics

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