Family firms better than other businesses

Jun 21, 2006

A Texas A&M University study has become one of the first to examine the competitiveness and stability of family businesses and finds both factors good.

Professor Jim Lee said family firms tend to experience higher employment and revenue growth and are, overall, more profitable than non-family businesses. He says his study suggests the average profit margin for family firms was 10 percent, 2 percent higher than non-family companies.

"Holding other things constant, family firms are likely to grow faster and be more profitable," Lee explains, noting family businesses comprise 35 percent of companies listed on the S & P 500 or the Fortune 500 index.

The study measured firm performance by net profit margin, employment, revenue, and gross income growth from 1992-2002. This time sample spans a full business cycle; the economy expanded from 1992 to March 2001 and then recessed for two quarters.

The research appears in the June issue of Family Business Review.

Copyright 2006 by United Press International

Explore further: Interactivity tools can boost persuasiveness of websites

Related Stories

Ag-tech startup helps farmers analyze water use

Mar 18, 2015

Water usage may be California's No. 1 topic in 2015—and last year and the one before that. As the state enters its fourth year of drought, everyone is seeking new options for monitoring and usage of this ...

Korean tech start-ups offer life beyond Samsung

Feb 23, 2015

As an engineering major at Seoul's Yonsei University, Yoon Ja-Young was perfectly poised to follow the secure, lucrative and socially prized career path long-favoured by South Korea's elite graduates.

Recommended for you

Music: Will climate change give us the blues?

Apr 14, 2015

Climate change is predicted to intrude into almost every area of life—from where we live, to what we eat and whom we war with. Now music can be added to the list.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.