Are Family Firms Born or Made? An Exploratory Investigation

Abstract

Do businesses tend to be born as family firms or do they become family firms at a later stage in their development? The question has important implications for family business studies. In this article we examine this question using data extracted from survey responses of small business clients of the Small Business Development Center (SBDC) program in the United States. The results suggest that most family firms are born that way but that a significant number of firms do arrive there through time. The relationship between age and family involvement appears to be concave—the rate of increase in family involvement slows as family firms become older and at some point family involvement may even decline.