The role of interorganizational trust and organizational efficacy in family and nonfamily firms

• This study extends research on family firm social capital and the theory of the family firm.
• This study examines interorganizational trust in relationships between family firms and their nonfamily suppliers.
• We find that organizational efficacy and interorganizational trust predict performance in family and nonfamily firms.
• Our findings suggest that the interaction of interorganizational trust and organizational efficacy predicts performance in family firms, but not in nonfamily firms.

This article extends research on family firm social capital by examining two components of family firm social capital, organizational efficacy and interorganizational trust, and their influence on performance in family and nonfamily firms. Using a sample of 157 family and nonfamily suppliers to a University, we find that suppliers’ organizational efficacy and trust in the buyer positively predict performance in family and nonfamily firms. Contrary to expectations, there were no significant differences between family and nonfamily firms in the level of organizational efficacy and interorganizational trust. We also find that the interaction of organizational efficacy and interorganizational trust predicts performance in family firms. Based on these findings, we discuss implications for theory development and provide suggestions for future research.