Cross-country research finds mixed performance effects of family involvement in management (FIM) but consistently positive performance effects of family involvement in ownership (FIO). We argue that cross-country differences in institutional trust and trust in family can help explain this discrepancy. We reason that trust in family normalizes family managers’ use of firm resources to satisfy family needs. In contrast, institutional trust orientates family managers’ attention toward improving firm performance. A meta-analysis supports our theory: greater trust in family increases and greater institutional trust reduces the gap between FIM and FIO's performance effects across countries.

Family firms, Family involvement in management, Family involvement in ownership, Institutional trust, Operating performance, Trust in family
dx.doi.org/10.1016/j.jwb.2021.101196, hdl.handle.net/1765/135167
Journal of World Business
Department of Applied Economics

Jaskiewicz, P, Block, J.H, Wagner, D, Carney, M, & Hansen, C. (Christopher). (2021). How do cross-country differences in institutional trust and trust in family explain the mixed performance effects of family management? A meta-analysis. Journal of World Business, 56(5). doi:10.1016/j.jwb.2021.101196