Family Firms and the Great Recession: Out of Sight, Out of Mind?

Leandro D'Aurizio

Bank of Italy

Livio Romano

Confindustia - Economic Research Department

June 28, 2012

This paper studies how family firms reacted to the 2008 economic crisis in terms of employment adjustment. By using a difference-in-difference approach, we provide empirical evidence that divergent paths of adjustment between family and non-family firms exist, with family firms systematically preferring to safeguard workplaces close to the firm's headquarters, compared to other plants. We offer a new theoretical framework consistent with these findings, that we define the social recognition motive, based on the psychological relation linking the family owner with his/her community of reference. We investigate possible alternative explanations for the results, most of which can be ruled out in our setting. Finally, we test more directly for the validity of the social recognition theory, finding encouraging results in line with the predictions.

Number of Pages in PDF File: 32

Keywords: Family Firms, Great Recession, Employment, Social Pressure

JEL Classification: C81, D22, J60, M14

working papers series

Download This Paper

Date posted: July 2, 2012 ; Last revised: July 24, 2012

Suggested Citation

D'Aurizio, Leandro and Romano, Livio, Family Firms and the Great Recession: Out of Sight, Out of Mind? (June 28, 2012). Available at SSRN: http://ssrn.com/abstract=2088266 or http://dx.doi.org/10.2139/ssrn.2088266

Contact Information

Leandro D'Aurizio
Bank of Italy ( email )
Via Nazionale 91
Rome, 00184
Livio Romano (Contact Author)
Confindustia - Economic Research Department ( email )
Viale dell'astronomia 30
Rome, 00144
Feedback to SSRN

Paper statistics
Abstract Views: 247
Downloads: 26
Paper comments
No comments have been made on this paper

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo3 in 0.594 seconds