Sensitivity to Shocks in Family Firms
(English)Manuscript (preprint) (Other academic)
In this study I examine the sensitivity to industry shocks in Swedish family firms. Family firms are believed to be more risk averse, have longer time horizons, and family owners are more easily identified with their company and its actions. I find that employment and sales in non-listed family firms are less sensitive to industry sales shocks. By being more cautious in terms of employment and sales, family firms could potentially function as to smooth out business cycles. The empirical analysis is based on full population data on Swedish firms from 1993 to 2009. By using data from tax registers, I am able to identify all family firms, both listed and non-listed. This has previously not been feasible. I also present tentative results on differences in wages and employment turnover. The estimations indicate that non-listed family firms pay lower wages on average. Moreover, family firms are found to have a lower probability of downsizing and growing in terms of employment. In contrast to earlier studies, no effect on any of the outcomes are found for listed firms.
IdentifiersURN: urn:nbn:se:liu:diva-100219OAI: oai:DiVA.org:liu-100219DiVA: diva2:660836