Seminar #15 – March 10, 2021

ABSTRACT – We investigate labor productivity differences between family and nonfamily firms using firm-level data from Chile. Our estimations are based on the method of unconditional quantile regression, which allows us to account for the heterogeneous behavior of family firms throughout the entire labor productivity distribution rather than merely focusing on the difference in mean productivities. We find that family-owned firms exhibit a premium at the lower end of the productivity distribution, whereas they produce at a discount relative to nonfamily firms in the upper tail of the distribution. Our findings are robust to potential endogeneity of family ownership, and provide a new perspective on the emerging debate concerning family firm resilience and the situations under which socioemotional wealth and financial wealth in family firms converge or diverge.