Family firms perform better than other businesses

A study published in the current issue of Family Business Review is one of the first to investigate the competitiveness and stability of family businesses. Author Jim Lee finds that family firms tend to experience higher employment and revenue growth over time and are overall more profitable than nonfamily businesses. The average profit margin for family firms was ten percent, two percent higher than nonfamily companies. "Holding other things constant, family firms are likely to grow faster and be more profitable," Dr. Lee explains.

Family businesses are the backbone of the global economy, making up 35 percent of the 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.


This study published in the June issue of Family Business Review. Media wishing to receive a PDF please contact [email protected]

Family Business Review combines scholarly research and practical experience in the only scientific journal devoted exclusively to exploration of the dynamics of the family firm. It is published on behalf of the Family Firm Institute, Inc.

Jim Lee is a professor at Texas A&M University-Corpus Christi. He works closely with local communities on business and economic development issues and has been an advisor to the city of Corpus Christi in Texas, Texas Family Business Association, and various Chambers of Commerce and workforce development agencies in south Texas. Dr. Lee is available for media questions and interviews.

Blackwell Publishing is the world's leading society publisher, partnering with 665 academic and professional societies. Blackwell publishes over 800 journals and, to date, has published more than 6,000 books, across a wide range of academic, medical, and professional subjects.

Last reviewed: By John M. Grohol, Psy.D. on 30 Apr 2016
    Published on All rights reserved.