The Impact of Family Involvement on SMEs' Performance: Theory and Evidence

Alfredo De Massis, Josip Kotlar, Giovanna Campopiano, Lucio Cassia
2013 Journal of Small Business Management  
By complementing agency theory with behavioral assumptions, we explore the effects of family involvement on SMEs' performance. We identify three separate dimensions of family involvement and hypothesize non-linear, direct and interaction effects on the performance of an SME. The evidence on 787 SMEs suggests that an inverted U-shaped relationship exists between family ownership and performance, and ownership dispersion among family members negatively affects performance. Balancing family and
more » ... ncing family and non-family members in the TMT is found to be beneficial to SMEs' performance, but the family ratio in the TMT becomes crucial only at high levels of family ownership.
doi:10.1111/jsbm.12093 fatcat:7rzc2qagcjh7dkpmi5bw2zda3e