The family's effect on family firm performance: A model testing the demographic and essence approaches

The demographic and essence approaches have emerged as two separate streams to tackle the issue of how the family affects family firm performance. However, this debate is still open. After analyzing 80 published articles from 2007 to 2011, I conclude that the contradictions between these two approaches come from implicit assumptions that are not modeled when each approach is tested individually. Therefore, the aim of this article is to put the demographic and essence approaches to the test. To reach this objective, I developed a theoretical framework to analyze the relationship between family management involvement, family-oriented strategic decision making, and family firm performance. I conclude that contradictory conclusions may result from each model whether they are tested separately or together.

► The aim of this article is to put the demographic and essence approaches to the test.
► Contradictory conclusions result whether models are tested separately or together.
► Family management involvement (FMI) is not associated with firm performance.
► Family-oriented decision making is positively related to firm and family performance.
► A suppression effect exists between FMI, decision making and family performance.