The rise and fall of family firms in the process of development

  • Maria Rosaria Carillo
  • Vincenzo LombardoEmail author
  • Alberto Zazzaro


This paper explores the causes and the consequences of the evolution of family firms in the growth process. The theory suggests that in early stages of development, valuable family specific human capital stimulated the productivity of family firms and the development process. However, in light of the rise in the importance of managerial talents for firms’ productivity in later stages, family firms generated a misallocation of managerial talents, curbing productivity and economic growth. Evidence supports the dual impact of family firms in the development process and the role of socio-cultural characteristics in observed variations in the productivity of family firms.


Family firms Economic development and growth Culture and social structure Allocation of talents Industrialization 

JEL Classification

D2 J62 L26 O14 O33 O4 Z1 



We are extremely grateful to Oded Galor (Editor-in-Chief) for the guidance and valuable comments that greatly improved this paper and to four anonymous referees for their suggestions. We warmly thank, for useful comments and suggestions, Francesco Drago, Stelios Michalopoulos, Holger Strulik and Fabrizio Zilibotti, as well as participants at the Conference on Intergenerational Transmission of Entrepreneurship, Occupations and Cultural Traits in the process of long-run economic growth (University of Naples Parthenope), Workshop on Economic Growth (OFCE-Nice), 2012 Annual Meeting of the Italian Economic Society (Matera), Workshop on Structural Change, Dynamics and Economic Growth (Livorno), NEUDC 2013 Conference (Harvard University), \(5^{th}\) Workshop on Equilibrium Analysis (University of Naples Federico II), 2014 Annual Conference of the Royal Economic Society (Manchester), 2014 Summer School in Economic Growth (Capri), 2014 Summer Workshop in Economic Growth (University of Warwick), 2015 Barcelona GSE Summer Forum (Barcelona), 2015 European Economic Association – Annual Meeting (Mannheim), 2017 13th CISEI (Capri), ASREC Europe 2017 (Bologna), and seminars held at Brown University, CSEF, Kobe University, Polytechnic University of Marche and University of Cagliari. Maria Rosaria Carillo and Vincenzo Lombardo gratefully acknowledge financial support from University of Naples Parthenope through the research funds programme “Bando di Ateneo per il sostegno alla partecipazione ai bandi di ricerca competitiva per il triennio 2016–2018”.

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Authors and Affiliations

  1. 1.Dipartimento di Studi Aziendali ed EconomiciUniversità degli Studi di Napoli Parthenope, Palazzo PacanowskiNaplesItaly
  2. 2.Dipartimento di Scienze economiche e statistiche and CSEFUniversità degli Studi di Napoli Federico II, Complesso Universitario di Monte Sant’AngeloNaplesItaly
  3. 3.MoFiRAnconaItaly

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