Exploring the family effect on firm performance: The impact of internal social capital dimensions on family firm performance

Abstract

Purpose

The purpose of this paper is to investigate how internal social capital – as a part of the familiness resources– affects family firm performance. The social capital theory states that internal social capital within family businesses is composed of three dimensions: the structural dimension, the relational dimension, and the cognitive dimension. The aim of the paper is to study the relationship between each dimension of internal social capital and family firm performance.

Design/methodology/approach

The paper employs an empirical investigation which is based on a sample of 114 Tunisian family firms.

Findings

Results demonstrate that the structural and relational dimensions are positively associated with financial and non-financial family firm’s performance. However, the cognitive dimension has a significant positive effect on financial performance but not on non-financial family firm performance.

Originality/value

The proposed model aims to test the direct effect of internal social capital dimensions on financial and non-financial family firm’s performance. Besides, there is a lack of empirical evidence aiming at understanding the impact of structural, cognitive and relational social capital on the performance of family firms.

Citation

Mani, Y. and Lakhal, L. (2015), "Exploring the family effect on firm performance: The impact of internal social capital dimensions on family firm performance", International Journal of Entrepreneurial Behavior & Research, Vol. 21 No. 6, pp. 898-917. https://doi.org/10.1108/IJEBR-06-2014-0100