Productivity and survival of family firms in Japan

Using data on a large number of Japanese firms, this paper empirically analyzes the relationship between family ownership of firms and productivity growth and survival. The results show that the annual productivity growth rate of family firms is approximately 2% slower than that of non-family firms. Because family firms attach importance to firm survival as a managerial objective, their probability of survival over a six-year period is 5–10% higher than that of non-family firms. The difference in performance between family and non-family firms is found to be limited to unlisted firms.

► We analyze the effects of family ownership on productivity growth and survival. ► We use a dataset of a large number of Japanese firms covering both listed and unlisted firms. ► The annual productivity growth rate of family firms is around 2% slower. ► Family firms’ probability of survival over a six-year period is 5–10% higher.