Effects of family ownership on SME performance

Resumen

This paper proposes an analysis of efficiency differences between family and non family controlled SME’s. The financial and organisational peculiaritiesof this kind of firms are discussed, drawing on Agency and Transaction Costs theories. Due to the empirically demonstrated importance of size in the differentiation between these two types of organisations, the paper distinguishes between different size segments, in terms of number of employees. Similarly, the singularities in the efficiency of family companies are analysed by distinguishing between sectors of activity. Contrary to what could be expected, no differences in the efficiency of family owned SME’s were found. Academic and professional implications of this result are discussed in the last section of the paper.