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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26391
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| Title: | Family Firms, Paternalism, and Labor Relations∗ |
| Authors: | Mueller, Holger M.
Philippon, Thomas |
| Issue Date: | Nov-2006 |
| Series/Report no.: | FIN-06-040 |
| Abstract: | Using firm-, industry-, and country-level data, we document a link
between family ownership and labor relations. Across countries, we find
that family ownership is relatively more prevalent in countries in which
labor relations are difficult, consistent with firm-level evidence
suggesting that family firms are particularly effective at coping with
difficult labor relations. Our cross-country results are robust to
controlling for minority shareholder protection and other potential
determinants of family ownership. Our results also hold if we use strike
data from the 1960s to predict cross-country variation in family
ownership thirty years later. We address causality in two ways. First,
we instrument our measure of the quality of labor relations using
‘Labor Origin’, a variable describing the extent to which
the emerging European liberal states in the 18th and 19th centuries
confronted guilds and labor organizations. Second, making use of
within-country variation at the industry level, we show
that–controlling for industry and country fixed
effects–industries that are more labor dependent have relatively
more family ownership in countries with worse labor relations. |
| URI: | http://hdl.handle.net/2451/26391 |
| Appears in Collections: | Finance Working Papers
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