PROSPERING ROOTS: UNDERSTANDING THE ECONOMIC DOMINANCE OF FAMILY BUSINESSES
Abstract
The economic development of nations, particularly those in the process of development, is intricately linked to the dynamism exhibited by private sector enterprises. Family businesses (FBs) constitute a significant segment within this realm, holding a prominent position in the European, American, and Asian economic landscapes (Neubauer and Lank, 1998). In regions like SubSaharan Africa and the Middle East, FBs carve out a staggering 95% share of the economic terrain (Gupta et al., 2009). Notably, various studies underscore the exceptional success of FBs when compared to other enterprise models (Villalonga and Amit, 2004; Allouche and Aman, 1995; Kargougou, 2020; Habbershon and Williams, 1999). The concept of firm performance, as elucidated by Morin et al. (1994), is a nuanced construct encompassing social, economic, political, and systemic dimensions. Despite this multifaceted nature, a consensus is yet to be reached regarding the selection of performance indicators (Tsambou and Kamga, 2016). This lack of consensus poses a challenge to accurately assessing and comparing the performance of different enterprises. To measure economic and financial performance, diverse indicators such as revenue growth (Gauzente, 2011), value added, earnings before interest, taxes, depreciation, and amortization, earnings before interest and taxes, net operating income, and net profit (Nawang, 2009) have been proposed. This study seeks to contribute to the ongoing discourse on firm performance, particularly within the context of family businesses. By examining the multidimensional nature of firm performance, encompassing social, economic, political, and systemic facets, the research aims to shed light on the factors influencing the success of FBs. Through a comprehensive analysis of various performance indicators, the study endeavors to identify the most relevant metrics for assessing the economic and financial health of family businesses. The research methodology involves an in-depth literature review, data collection from a diverse range of family businesses, and statistical analysis to discern patterns and correlations.
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Family businesses, Firm performance, Economic development, Performance indicators, Developing countriesDownloads
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