Employment in Family Managed Firms: Less But Safe? Analysing Labour Demand of German Family Managed Firms with a Treatment Model for Panel Data

Abstract

This paper analyses the differences in labour demand between family and non‐family managed firms. These firms seem to have better employment performance than non‐family controlled companies. Therefore, this study applies a treatment model for panel data controlling for endogeneities of being a family managed firm or not. The results of the estimations indicate that labour demand is possibly larger because of family members joining the firms as extra employees. Moreover, labour turnover is lower, supporting the assumption that family firms offer some kind of implicit labour contracts. However, in opposite to previous results, it seems that only small family managed firms show different employment behaviour.

Keywords: family firms, firm size, labour demand, panel data, treatment model

JEL Classification: C21, C23, D22, G32, J23