Family Values or Crony Capitalism?

30 Pages Posted: 30 Jan 2013

See all articles by Harold James

Harold James

Princeton University - Department of History; National Bureau of Economic Research (NBER)


Family firms are very prominent in many parts of the world, including in many of the most dynamic emerging markets. They are often thought to be associated with poor corporate and political governance. This article examines the debate about their durability and efficiency, using material drawn from the long experience of continental Europe and sketches out an ideal type of the family, in which there is a historical experience of entrepreneurship, a brand, and a network built around family enterprise. It then tests various common explanations for the prevalence of family firms, including Roman law versus common law traditions, tax incentives, share voting privileges, and inheritance law; and finds that each applies only in a quite particular historical epoch. Finally, the article suggests that family businesses offer advantages that are most apparent at times of shocks and discontinuities, and that they are thus a response to uneven development.

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Suggested Citation

James, Harold, Family Values or Crony Capitalism?. Capitalism and Society, Vol. 3, Issue 1, Article 5, 2008, Available at SSRN:

Harold James (Contact Author)

Princeton University - Department of History ( email )

Princeton, NJ 08544
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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