Altruism and Agency in the Family Firm: Exploring the Role of Family, Kinship and Ethnicity

Posted: 27 Feb 2006

See all articles by Neri Karra

Neri Karra

London School of Economics & Political Science (LSE) - European Institute

Paul Tracey

University of Warwick - Warwick Business School

Nelson Phillips

Imperial College Business School

Date Written: January 2006

Abstract

This article examines the relationship between altruism and agency costs in family business through an in-depth case study of a family firm. We found that altruism reduced agency costs in the early stages of the business, but that agency problems increased as the venture became larger and more established. Moreover, we suggest that altruistic behavior need not be confined to family and close kin, but may extend through networks of distant kin and ethnic ties. We thus present a more complex view of the agency relationship in family business than is often portrayed in the existing literature.

Keywords: family business, agency theory, altruism, ethnicity, entrepreneurship

JEL Classification: M1, M13

Suggested Citation

Karra, Neri and Tracey, Paul and Phillips, Nelson, Altruism and Agency in the Family Firm: Exploring the Role of Family, Kinship and Ethnicity (January 2006). Available at SSRN: https://ssrn.com/abstract=885483

Neri Karra (Contact Author)

London School of Economics & Political Science (LSE) - European Institute ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Paul Tracey

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

Nelson Phillips

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

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