Exploring the productivity puzzle in family and non-family businesses through stability and crisis times

Frame of the research. Over the past 20 years, Italy has performed poorly in terms of productivity compared to the others OECD countries. At firm level, firm productivity is affected by governance mechanisms and ownership structures. Purpose of the paper. The paper studies the effect of non-listed family and non-family ownership on the productivity of Italian firms during periods of economic crisis and stability, in the light of the extended stewardship-based SEW theory and restricted agency-based SEW theory (Miller and Le Breton-Miller, 2014). Methodology. The paper uses an unconditional quantile-based regression of total factor productivity over a set of covariates including the family nature of the firm and the time (considering a time span involving both economic stability and crisis times) Results. In times of economic stability, family firms ranking high in the distribution of productivity perform worse than non-family firms. The economic crisis does not have relevant consequences on family firms’ performance in terms of productivity. Research limitations. Despite Italy is a well-suited context to analyse family business, our inquiry could be better tested extending the evidence beyond national boundaries. Managerial implications. The paper sheds light on the transition between exploratory and exploitative behavior (or vice versa) in family versus non-family businesses when the external economic conditions change (Patel and Chrisman, 2014). Originality of the paper. The novel, hand collected, balanced panel data set allows comparing a large sample of non-listed Italian family and non-family firms during a 11-year long period of time including a worldwide economic and financial crisis and a congruous number of years before and after the advent of the crisis. The empirical strategy and estimation technique permits understanding under what conditions the possibly conflicting prescriptions of the extended stewardship-based SEW theory and restricted agency-based SEW theory hold.