Title: An agency approach to family business success in different economic conditions

Authors: Sibin Wu; Mark X. James; Bin Wang; Joo Y. Jung

Addresses: Department of Management, College of Business Administration, University of Texas-Pan American, Edinburg, TX 78541-2999, USA. ' Division of Business and Management, United International College, Zhuhai, China. ' College of Business Administration, University of Texas-Pan American, Edinburg, TX 78539, USA. ' College of Business Administration, University of Texas-Pan American, Edinburg, TX 78541-2999, USA

Abstract: Research comparing family businesses and public companies has generally ignored the economic influence. We examine how public and family businesses fare in different economies. We argue that governance mechanisms may work for large public companies, but may not be suitable for family businesses. We find that during economic slowing down, family businesses tend to perform better than public companies because they have better control of their businesses and hence can make quick and decisive decisions. Another finding is that during economic upturn, duality is negatively related to company performance, however, that negative impact can be offset by family business status.

Keywords: agency theory; performance; control; family business; economic downturn; economic upturn; public companies; governance; business control.

DOI: 10.1504/IJMP.2012.043930

International Journal of Management Practice, 2012 Vol.5 No.1, pp.25 - 36

Published online: 01 Dec 2011 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article