Employee layoffs in times of crisis: do family firms differ?

Massimo Baù*, Johan Karlsson, Kajsa Haag, Daniel Pittino, Francesco Chirico

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

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Abstract

In this study, we seek to understand firm behaviour during times of crisis, with a particular focus on family firms in different contexts. We theorize that family control mitigates (i.e. negatively moderates) the relationship between economic crisis and the layoff of employees, resulting in a higher propensity of family firms to retain their employees during a crisis compared to their nonfamily counterparts. Furthermore, taking a closer look at family firms, based on their location, we argue that family firms in rural regions are more likely to adopt measures leading to involuntary job turnover than family firms in urban areas due to a higher sensitivity to the loss of socioemotional wealth following a business closure. Relying on a panel dataset of Swedish private firms active in the period 2004–2012, our study contributes to a better understanding of family firms as employers in different contexts.

Original languageEnglish
Pages (from-to)722-744
Number of pages23
JournalEntrepreneurship and Regional Development
Volume36
Issue number5-6
Early online date31 Jan 2024
DOIs
Publication statusPublished - 2024

Bibliographical note

© 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. Version archived for private and non-commercial use with the permission of the author/s and according to publisher conditions. For further rights please contact the publisher.

Keywords

  • economic crisis
  • employee layoff
  • Family firms
  • local embeddedness
  • rural environment
  • socioemotional wealth

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