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The influence of political characteristics on the relationship between family control and firm performance: A meta-analytical approach

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  • Lohwasser, Todor Stefan
  • Hoch, Felix
Abstract
This multilevel meta-analytic study, based on 176 studies from 36 countries, examines the impact of political characteristics on the performance of family firms when comparing them to non-family firms (k=311, N=1,598,964). Our findings support the expectation that family firm characteristics are positively related to firm performance. We trace the variance between the studies to differences in certain political characteristics of the firms' countries of origin: government stability, regime stability, regime type and special periods of factionalism. In terms of government and regime stability, we find positive moderating effects on the focal relationship. We further show that periods of factionalism even reverse the superior performance of family firms. While the focal relationship becomes stronger in democracies, the relationship turns negative when looking at anocracies and becomes stronger and positive again considering autocracies. Finally, we reveal that government stability partly mediates the influence of the regime type. Therefore, government stability is a crucial condition for family firms to prosper in any political environment. Our study has several implications for the interplay between family firms and politics: First, the comparative advantage of family firms depends on specific political characteristics. Second, the ability of institutions to provide stability is more important for family firms than the actual institutional setting itself. Third, the impact of a political environment on economic success differs between family firms and nonfamily firms and therefore depends on the structure of the given economy.

Suggested Citation

  • Lohwasser, Todor Stefan & Hoch, Felix, 2019. "The influence of political characteristics on the relationship between family control and firm performance: A meta-analytical approach," Discussion Papers of the Institute for Organisational Economics 5/2019, University of Münster, Institute for Organisational Economics.
    • Handle: RePEc:zbw:umiodp:52019
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    Cited by:

    1. Lohwasser, Todor S., 2019. "The relative performance of family firms depending on the type of financial market," Discussion Papers of the Institute for Organisational Economics 8/2019, University of Münster, Institute for Organisational Economics.
    2. Hoch, Felix & Lohwasser, Todor S., 2019. "The influence of institutions on venture capital: How transaction costs, uncertainty, and change affect new ventures," Discussion Papers of the Institute for Organisational Economics 9/2019, University of Münster, Institute for Organisational Economics.

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    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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