Small Business Economics

, Volume 40, Issue 4, pp 953-976

First online:

Firm ownership and productivity: a study of family and non-family SMEs

  • Francesco BarberaAffiliated withDepartment of Economics, School of Business, Technology and Sustainable Development, Bond University Email author 
  • , Ken MooresAffiliated withAustralian Centre for Family Business, School of Business, Technology and Sustainable Development, Bond University

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Motivated by a lack of consensus in the current literature, the objective of this paper is to reveal whether family firms are more or less productive than non-family firms. As a first step, this paper links family business research to the theoretical notion that family involvement has an effect on the factors of production from a productivity standpoint. Second, by using a Cobb–Douglas framework, we provide empirical evidence that family labour and capital indeed yield diverse output contributions compared with their non-family counterparts. In particular, family labour output contributions are significantly higher, and family capital output contributions significantly lower. Interestingly, differences in total factor productivity between family and non-family firms disappear when we allow for heterogeneous output contributions of family production inputs. These findings imply that the assumption of homogeneous labour and capital between family and non-family firms is inappropriate when estimating the production function.


Heterogeneous input elasticity Family firm Cobb–Douglas production function Total factor productivity

JEL Classifications

D22 D24 J24 M11 L26