The vast majority of firms in developing economies are micro and small enterprises owned by families whose members also provide the labour to the units. Often, they fail to grow in size even with the relaxation of credit constraints. In this paper, we show that frictions in the labour market...

The vast majority of firms in developing economies are micro and small enterprises owned by families whose members also provide the labour to the units. Often, they fail to grow in size even with the relaxation of credit constraints. In this paper, we show that frictions in the labour market...

This study explores the relation between family ownership and cost elasticity. Using a sample of 1,746 European firms, we first find that family ownership, a prevalent ownership type with unique characteristics, is associated with greater cost elasticity. Further, we use four empirical settings...

The vast majority of firms in developing economies are micro and small enterprises owned by families whose members also provide the labour to the units. Often, they fail to grow in size even with the relaxation of credit constraints. In this paper, we show that frictions in the labour market...

This paper investigates whether family ownership affects a firm’s cost behavior and profitability. We find that in response to changes in business activity level, family firms adjust their costs differently than non-family firms. That is, family firms decrease costs more sharply upon a sales...