Small Business Economics

, Volume 45, Issue 4, pp 771–785 | Cite as

The impact of small- and medium-sized family firms on economic growth

  • Esra Memili
  • Hanqing Fang
  • James J. Chrisman
  • Alfredo De MassisEmail author


Drawing on family business studies and the knowledge-based view of economic growth, we develop and test a model of how the prevalence of small- and medium-size enterprises (SMEs) under family control affects economic growth. Specifically, we propose there is an inverted U-shaped relationship between family SMEs’ proportional representation and economic growth owing to their relative strengths and limitations vis-à-vis non-family SMEs. Using state-level data from the US between 2004 and 2010, we find support for our hypothesis and the underlying contention that economic growth is maximized when an economy includes a balanced mix of family and non-family SMEs.


Family business Economic growth Family firms SMEs Knowledge asymmetry 

JEL Classifications

D82 asymmetric information L26 entrepreneurship O47 empirical studies of economic growth O51 US 


Compliance with ethical standards

The authors declare that their manuscript is compliant with ethical standards and they have no conflict of interest.


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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  • Esra Memili
    • 1
  • Hanqing Fang
    • 2
    • 3
  • James J. Chrisman
    • 2
    • 4
  • Alfredo De Massis
    • 5
    Email author
  1. 1.Bryan School of Business and EconomicsUniversity of North Carolina at GreensboroGreensboroUSA
  2. 2.Department of Management and Information SystemsMississippi State UniversityMississippi StateUSA
  3. 3.China Small and Medium Business Research InstituteZhejiang University of TechnologyZhejiangChina
  4. 4.Centre for Entrepreneurship and Family EnterpriseUniversity of AlbertaEdmontonCanada
  5. 5.Centre for Family Business, Department of Entrepreneurship, Strategy and InnovationLancaster University Management SchoolBailrigg, LancasterUK

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