Family Firm Performance: Further Evidence


Jim Lee is a Professor of Economics at Texas A&M University–Corpus Christi. He has worked closely with local communities on business and economic development issues. His research focuses on monetary and fiscal policy issues and macroeconomic dynamics. His research on family businesses was conducted while working as a Research Scholar at the Family Owned Business Institute. Jim Lee may be contacted at Texas A&M University, 6300 Ocean Dr., Corpus Christi, TX 78412;


This article empirically investigates the competitiveness and stability of family-owned firms relative to firms owned by diverse shareholders. Founding families are present in about one-third of the S&P 500—the sample of this study. Data gathered over the 1992–2002 period confirm that family firms tend to experience higher employment and revenue growth over time and are more profitable. Regression analysis also supports that firm performance improves when founding family members are involved in management. Although evidence on the relative stability in employment among family firms over the long run is tenuous, data from the most recent recession support the role that founding families play in maintaining employment stability during temporary market downturns.