Productivity Growth in Private Equity-Backed Family Firms

Croce, A., Martí, J. (2016). Productivity Growth in Private Equity Backed Family Firms. Entrepreneurship: Theory and Practice, 40(3), 657-683.

46 Pages Posted: 28 Aug 2014 Last revised: 15 Dec 2017

See all articles by Annalisa Croce

Annalisa Croce

Polytechnic University of Milan - Dipartimento di Economia e Produzione

José Martí

Universidad Complutense de Madrid - Department of Accounting and Finance

Date Written: June 30, 2014

Abstract

We study the reluctance of family firms to accept private equity (PE) investors and the impact of PE on family firm's performance. We analyze the productivity growth in a sample of 257 PE-backed family firms, 143 of which were run by the founding generation. We compare these firms with both non-PE-backed family firms and non-family PE-backed firms. We find that family firms accessing PE show lower productivity growth before the initial PE round, which is driven by an imbalance between inputs and output, especially in founder-controlled firms. Our results also confirm the positive impact of PE involvement on productivity growth in founder-controlled firms.

Keywords: private equity, family firms, productivity growth, performance, family generations

JEL Classification: L25, G24

Suggested Citation

Croce, Annalisa and Martí Pellón, José, Productivity Growth in Private Equity-Backed Family Firms (June 30, 2014). Croce, A., Martí, J. (2016). Productivity Growth in Private Equity Backed Family Firms. Entrepreneurship: Theory and Practice, 40(3), 657-683., Available at SSRN: https://ssrn.com/abstract=2488415

Annalisa Croce

Polytechnic University of Milan - Dipartimento di Economia e Produzione ( email )

Piazza Leonardo da Vinci, 32
Milan, 20133
Italy

José Martí Pellón (Contact Author)

Universidad Complutense de Madrid - Department of Accounting and Finance ( email )

Carretera de Humera s/n
Madrid 28223, Madrid 28223
Spain
+ 3491 3942310 (Phone)
+ 34 91 3942534 (Fax)

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