Family firms better than other businesses

June 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: Facebook is making a big change to your news feed

Related Stories

Facebook is making a big change to your news feed

January 12, 2018

Facebook is radically altering the formula that determines what bubbles to the top of people's news feed, part of sweeping changes the giant social network has planned to address growing controversy over the role it plays ...

Inventing the 'Google' for predictive analytics

December 20, 2017

Companies often employ number-crunching data scientists to gather insights such as which customers want certain services or where to open new stores and stock products. Analyzing the data to answer one or two of those queries, ...

Recommended for you

Crowds within crowd found to outperform 'wisdom of the crowd'

January 18, 2018

A team of researchers affiliated with institutions in Argentina, the U.S. and Germany has found that there is a way to improve on the "wisdom of the crowd"—separate the people in a given crowd into smaller groups and let ...

Study sheds new light on ancient human-turkey relationship

January 17, 2018

For the first time, research has uncovered the origins of the earliest domestic turkeys in ancient Mexico. The study also suggests turkeys weren't only prized for their meat—with demand for the birds soaring with the Mayans ...

0 comments

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.