Networks and family firm performance: some evidence from Italy

ABSTRACT

Using a large sample of Italian small-medium sized firms, this study analyses the effects of formal inter-firm cooperation on the performance of family firms (FFs). The study is based on the network contract (‘Contratto di rete’) implemented in Italy in 2009. The results show that networks have a positive effect on FFs’ performance, while no conclusive evidence is found for non-FFs. Additionally, the advantages for southern family firms and for small firms are considerable.

KEYWORDS:

• Family firms
• formal business networks
• performance

JEL CLASSIFICATION:

• G34
• L24
• L25

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ While there is no agreement on the definition of a family business (Hernández-Linares and López-Fernández 2018), most scholars agree that the family must be the dominant coalition within the firm in order to exercise more authority over corporate decision making than others (Chrisman, Chua, and Sharma 2005; Chua, Chrisman, and Sharma 1999). This usually entails a single family holding a substantial fraction of the company’s shares. In line with this, numerous studies used this criterion to categorize firms into family and non-family owned businesses (Classen et al. 2014).