The Scale and Nature of Family Business

Abstract

Researchers and policy-makers must clarify andjustify the criteria used to define family business.Once the scale of thefamily business phenomenon is more clearly understood, policies encouraging thedevelopment and survival of family firms may be introduced; for example, policymakers may lower or abolish capital taxes, which hinder the inter-generationaltransfer of business, if the success of family firms is shown to be integral tothe nation's economic health. This review of recent research on the demographics and performance of familybusinesses reveals that family firms are likely to be both older and smallerthan non-family firms and are under-represented in the banking, financing,insurance and business services sectors.It is difficult to draw acorrelation between impressive performance and family ownership, primarilybecause the definition of the family firm remains open todebate.Researchers wishing to define the family firm would do well toembrace a fairly broad definition.Reluctance to seek a judiciousdefinition will perpetuate the myths surrounding the economic contribution offamily businesses. (SAA)

Keywords: Non-family firms, Operator ownership, Succession, Family firms, Firm performance, Firm age, Firm size