For love and money: Marital leadership in family firms

We investigate how leadership by couples affects the profitability of family firms. Using comprehensive data from Italy, we show that family firms led by married couples perform significantly better than other family firms. This result is robust to several estimation techniques, including matching,...

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Bibliographic Details
Published inJournal of corporate finance (Amsterdam, Netherlands) Vol. 46; pp. 461 - 476
Main Authors Amore, Mario Daniele, Miller, Danny, Le Breton-Miller, Isabelle, Corbetta, Guido
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.10.2017
Subjects
Family firm
Leadership
Marriage
Leadership
G34
J12
Family firm
Performance
Marriage
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Summary:We investigate how leadership by couples affects the profitability of family firms. Using comprehensive data from Italy, we show that family firms led by married couples perform significantly better than other family firms. This result is robust to several estimation techniques, including matching, instrumental variables and transition analyses. Marital leadership works best when firm operations are complex and knowledge-based, as well as when the firm is subject to agency conflicts due to weak competition and poor legal infrastructure. Studying the mechanisms behind these results, we show that the presence of couples at the top of the firm enhances the willingness to invest during uncertain times, reduces employee turnover, and improves labor productivity. •Family firms led by couples perform better than other family firms•Marital leadership works best in contexts under greater complexity and agency conflicts•Marital leadership makes firms invest during uncertain times, it reduces employee turnover and improves labor productivity
ISSN:0929-1199
1872-6313
DOI:10.1016/j.jcorpfin.2017.09.004