![]() In contrast, family firms which are not publically listed and are privat e in nature are less productive by about 18% than non- family businesses (W all, 1998). Additionally, several studies found that the businesses where founding family still retained control were more efficient when compared to businesses without control of founding family (Bonilla et al., 2010). They found that although the profitability of family businesses is not significantly different, the productivity levels of family businesses were higher than that of non- family businesses. Galve-Górriz and Salas-Fumás (1996) studied both profitability and productivity of family businesses in Spain. ![]() ![]() Apart from performance, several studies have also analysed the difference in productivity levels of family and non-family businesses. Alternatively, according to Barth et al., (2005), cautious behavior of family owners may limit the growth and diversification of a family firm. In theory, family businesses can be more efficient than non-family businesses due to several reasons like lower agency costs (Hill & Snell, 1989 Shleifer & Vishny, 1997), motivation to maintain the longevity of the busi ness (And ers on & Reeb, 2003). According to several studies, family busi ness es have low prope nsit y to take higher debts as it can result in loss of control (Gallo & Vilaseca, 1996 McConaughy et al. Several studies on the relevance of involvement of family members and firm performance did not yield significant results (Chrisman et al., 2004 Demsetz & Villalonga, 2001 Himmelberg et al., 1999 Schulze et al., 2001). On the other hand, in a similar study in Indonesia, from 2006 to 2010, Singapurwoko (2013) got opposite results and found that non-family businesses were better performers than family businesses. (2008) studied family businesses in Japan from 1998-2003 and found family businesses are better performers than non-family businesses. 12% studies reported opposite results and the remaining 28% studies showed the performance of family businesses is not significantly different from non-family businesses.
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