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Abstract
The main purpose of this article is to examine the role of intangible family resources in the performance of family enterprises in Tanzania. In particular, the article examines the role of information sharing, family patient capital and family labor in firm performance. Using a sample of 163 family firms and the structural equation model of analysis, the findings indicate that family patient capital and information sharing contribute significantly to the performance of firms. With regard to the cost of labor, the study does not show any evidence that lower labor costs improve family firms' performance, most probably because these businesses incur additional labor costs which are not directly linked to the business. Based on the results, it is concluded that the family has an influence on the strategic level of family businesses, thereby contributing to their success.
Notes
Whereas micro enterprises employ up to four workers, small enterprises employ between five and 49 workers, and medium enterprises employ between 50 and 99 people (URT, Citation2003).
There are three types of structural models: default model (the researcher's structural model), independence model (the one which assumes that all relationships among variables are 0), and saturated model (the fully explanatory model in which there are as many parameter estimates as degrees of freedom; Garson, Citation2008).