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Familial relationships and firm performance: the impact of entrepreneurial family relationships

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  • Evans Korang Adjei
  • Rikard H. Eriksson
  • Urban Lindgren
  • Einar Holm

Abstract

While the family may serve as a resource for entrepreneurs, it has been studied separately in different disciplines. In this paper, we combine the arguments on familial relationships (family firm literature) and skill variety (regional learning literature) to analyse how different forms of entrepreneurial family relationships (co-occurrences) facilitate firm performance, and how familial relationships moderate the effects of skill variety on firm performance. Using longitudinal data (2002–2012) on a sample of privately owned firms with up to 50 employees with matched information on all employees, our results show that entrepreneur–children relationship is the dominant dyad familial relationship in family firms. The fixed effects estimates demonstrate that entrepreneurial family relationships do affect firm performance but that this is dependent on the type of familial relationship. Children and spouses show a positive relationship with firm performance while siblings of the entrepreneur show no significant relationship with performance. The estimates further indicate that familial relationships involving spouses abate the negative effects of having too similar or too different types of skills. The paper thus contributes to new knowledge regarding not only whether family relationships matter for performance, but also in what way they matter.

Suggested Citation

  • Evans Korang Adjei & Rikard H. Eriksson & Urban Lindgren & Einar Holm, 2019. "Familial relationships and firm performance: the impact of entrepreneurial family relationships," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 31(5-6), pages 357-377, May.
    • Handle: RePEc:taf:entreg:v:31:y:2019:i:5-6:p:357-377
    DOI: 10.1080/08985626.2018.1514074
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    Cited by:

    1. Demirbağ Orkun & Demirbağ Kübra Şimşek & Batı Gülgönül Bozoğlu, 2022. "Women Entrepreneurs’ Education Level, Political Skill, and Firm Performance: Political Influence and Human Capital Theories," Journal of Management and Business Administration. Central Europe, Sciendo, vol. 30(1), pages 40-69, March.
    2. Basco, Rodrigo & Suwala, Lech, 2021. "Spatial familiness and family spatialities—searching for fertile ground between family business and regional studies," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 7-32.
    3. Osama Wagdi & Amira Hasaneen, 2019. "Obstacles and success factors for entrepreneurship: a comparative analysis between Egypt and Nigeria," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 7(2), pages 962-976, December.
    4. Soluk, Jonas & Kammerlander, Nadine & Darwin, Solomon, 2021. "Digital entrepreneurship in developing countries: The role of institutional voids," Technological Forecasting and Social Change, Elsevier, vol. 170(C).
    5. Antonia Canosa & Heike Schänzel, 2021. "The Role of Children in Tourism and Hospitality Family Entrepreneurship," Sustainability, MDPI, vol. 13(22), pages 1-14, November.

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