Two general conclusions can be drawn from the historical and empirical economic research on family firms: (1) it is impossible to identify a single de nitive destiny for proprietary capitalism in the process of industrial development regardless of the cultural and institutional context in which the family rms operate; (2) in the same or similar economic environments well-performing (well managed) coexist with underperforming (poorly managed) family rms. In this paper, we develop an overlapping generations model, where agents are endowed with heterogeneous innate talent, and family rms have a comparative advantage over non-family enterprises as they have access to an additional source of immaterial capital, namely the network of family connections. Our results accommodate both the polarization of family rms into two groups with di erent levels of pro tability and the uncertain destiny of proprietary capitalism between a crony and an entrepreneurial society, depending on the institutional framework and technological dynamism of the economy.
Family connections and entrepreneurial human capital: The uncertain destiny of proprietary capitalism
LOMBARDO, VINCENZO;CARILLO, Maria Rosaria;
2013-01-01
Abstract
Two general conclusions can be drawn from the historical and empirical economic research on family firms: (1) it is impossible to identify a single de nitive destiny for proprietary capitalism in the process of industrial development regardless of the cultural and institutional context in which the family rms operate; (2) in the same or similar economic environments well-performing (well managed) coexist with underperforming (poorly managed) family rms. In this paper, we develop an overlapping generations model, where agents are endowed with heterogeneous innate talent, and family rms have a comparative advantage over non-family enterprises as they have access to an additional source of immaterial capital, namely the network of family connections. Our results accommodate both the polarization of family rms into two groups with di erent levels of pro tability and the uncertain destiny of proprietary capitalism between a crony and an entrepreneurial society, depending on the institutional framework and technological dynamism of the economy.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
