Family Firms and the Great Recession: Out of Sight, Out of Mind?
39 Pages Posted: 3 May 2013
There are 2 versions of this paper
Family Firms and the Great Recession: Out of Sight, Out of Mind?
Family Firms and the Great Recession: Out of Sight, Out of Mind?
Date Written: April 24, 2013
Abstract
This paper studies how family firms reacted to the 2008 economic crisis by adjusting employment. In particular, we look at how the geographical distribution of the workforce may have led to divergencies between family and non-family firms. Using a difference-in-difference approach, we provide empirical evidence that paths of adjustment did diverge, with family firms systematically preferring to safeguard workplaces close to headquarters. We offer a new theoretical framework, the social recognition motive, that is consistent with this finding; it is based on contributions in the literature on corporate governance that stress the importance of the non-pecuniary benefits of the owner's control of the family firm. The social recognition motive originates from the psychological relation linking the family-firm owner with his or her community. The theory also offers a clear set of predictions that are all confirmed by the data. Alternative explanations, although theoretically plausible, seem to be ruled out in our setting.
Keywords: family firms, Great Recession, employment, social pressure
JEL Classification: C81, D22, J60, M14
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?
By Lucia Foster, John Haltiwanger, ...
-
Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?
By Lucia Foster, John Haltiwanger, ...
-
Measuring and Explaining Management Practices Across Firms and Countries
By Nicholas Bloom and John Van Reenen
-
Measuring and Explaining Management Practices Across Firms and Countries
By John Van Reenen and Nicholas Bloom
-
Measuring and Explaining Management Practices Across Firms and Countries
By Nicholas Bloom and John Van Reenen
-
Measuring and Explaining Management Practices Across Firms and Countries
By Nicholas Bloom and John Van Reenen
-
Management Practices Across Firms and Countries
By Nicholas Bloom, Christos Genakos, ...
-
Inside the Family Firm: The Role of Families in Succession Decisions and Performance
By Morten Bennedsen, Kasper Meisner Nielsen, ...
-
Inside the Family Firm: The Role of Families in Succession Decisions and Performance
By Morten Bennedsen, Kasper Meisner Nielsen, ...