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For love and money: Marital leadership in family firms

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  • Amore, Mario Daniele
  • Miller, Danny
  • Le Breton-Miller, Isabelle
  • Corbetta, Guido

Abstract

We investigate how leadership by couples affects the profitability of family firms. Using comprehensive data from Italy, we show that family firms led by married couples perform significantly better than other family firms. This result is robust to several estimation techniques, including matching, instrumental variables and transition analyses. Marital leadership works best when firm operations are complex and knowledge-based, as well as when the firm is subject to agency conflicts due to weak competition and poor legal infrastructure. Studying the mechanisms behind these results, we show that the presence of couples at the top of the firm enhances the willingness to invest during uncertain times, reduces employee turnover, and improves labor productivity.

Suggested Citation

  • Amore, Mario Daniele & Miller, Danny & Le Breton-Miller, Isabelle & Corbetta, Guido, 2017. "For love and money: Marital leadership in family firms," Journal of Corporate Finance, Elsevier, vol. 46(C), pages 461-476.
    • Handle: RePEc:eee:corfin:v:46:y:2017:i:c:p:461-476
    DOI: 10.1016/j.jcorpfin.2017.09.004
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    More about this item

    Keywords

    Family firm; Performance; Leadership; Marriage;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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