Sales and Employment Changes in Entrepreneurial Ventures with Family Ownership: Empirical Evidence from High-Tech Industries

Authors

  • Massimo G. Colombo,

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    • Massimo G. Colombo is Full Professor of Economics of Technical Change at the Department of Management, Economics and Industrial Engineering, Politecnico di Milano.
  • Alfredo De Massis,

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    • Alfredo De Massis is Reader in Family Business & Director of the Centre for Family Business at Institute for Entrepreneurship and Enterprise Development, Lancaster University Management School, and professor at the University of Bergamo where he founded and co-led the Center for Young & Family Enterprise.
  • Evila Piva,

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    • Evila Piva is Assistant Professor at the Department of Management, Economics and Industrial Engineering, Politecnico di Milano.
  • Cristina Rossi-Lamastra,

    Corresponding author
    • Address correspondence to: Cristina Rossi-Lamastra, Assistant Professor, Polimi, via Lambruschini 4/b, Milan 20156, Italy. E-mail: cristina1.rossi@polimi.it.

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    • Cristina Rossi-Lamastra is Assistant Professor at the Department of Management, Economics and Industrial Engineering, Politecnico di Milano.
  • Mike Wright

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    • Mike Wright is Professor of Entrepreneurship at Imperial College Business School and the Founder and Director of the Centre for Management Buy-Out Research.

Errata

This article is corrected by:

  1. Errata: Erratum Volume 52, Issue 4, 829, Article first published online: 23 September 2014

Abstract

We examine the relation between changes in employment and changes in sales for entrepreneurial ventures with and without family ownership. We argue that this positive relation is weaker for entrepreneurial ventures with family ownership. The goal of preserving socio-emotional wealth (SEW) makes indeed these firms more reluctant to hire (fire) employees in correspondence with an increase (decrease) in sales than their counterparts without family ownership. Results on a sample of Italian entrepreneurial ventures in high-tech industries support our arguments. They also show that the strength of the relation depends on the composition of the entrepreneurial team.

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