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

Author

Listed:
  • Maria Rosaria Carillo

    (Università di Napoli Parthenope)

  • Vincenzo Lombardo

    (Università di NapoliParthenope)

  • Alberto Zazzaro

    (Università di Napoli Federico II, CSEF and MoFiR)

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. JEL Classification: D2, J62, L26, O14, O33, O4, Z1.

Suggested Citation

  • Maria Rosaria Carillo & Vincenzo Lombardo & Alberto Zazzaro, 2019. "The Rise and Fall of Family Firms in the Process of Development," CSEF Working Papers 521, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  • Handle: RePEc:sef:csefwp:521
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    2. Guo‐Hua Cao & Jing Zhang, 2022. "The entrepreneurial ecosystem of inclusive finance and entrepreneurship: A theoretical and empirical test in China," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 1547-1568, January.
    3. James B. Ang, 2019. "Agricultural legacy and individualistic culture," Journal of Economic Growth, Springer, vol. 24(4), pages 397-425, December.
    4. Uchida, Hirofumi & Yamada, Kazuo & Zazzaro, Alberto, 2023. "Management innovations in family firms after CEO successions: Evidence from Japanese SMEs," Japan and the World Economy, Elsevier, vol. 66(C).
    5. Cheng, Chen & Li, Wanrong & Liu, Guanchun & Liu, Yuanyuan, 2023. "Origin matters: Institutional imprinting and family firm innovation in China," Emerging Markets Review, Elsevier, vol. 55(C).
    6. Chu, Angus & Cozzi, Guido & Fan, Haichao, 2022. "Natural Selection and Innovation-Driven Growth," MPRA Paper 113502, University Library of Munich, Germany.
    7. Castañeda Dower, Paul & Gerber, Theodore P. & Weber, Shlomo, 2022. "Firms, kinship networks, and economic growth in the Kyrgyz Republic," Journal of Comparative Economics, Elsevier, vol. 50(4), pages 997-1018.
    8. Chenchen Fan & Mingming Jiang & Bo Zhang, 2024. "Beyond cultural norms: how does historical rice farming affect modern firms' family control?," Economica, London School of Economics and Political Science, vol. 91(363), pages 770-808, July.
    9. Li, Qing & Hu, Dezhuang & Li, Tang, 2022. "The innovation of family firms in China: New evidence from the China employer-employee survey," China Economic Review, Elsevier, vol. 72(C).
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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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