Abstract

This paper investigates the influence of family control on the quality of labor relations. Using French workplace-level data, we find that family firms experience less frequent and less intense labor conflicts. Moreover, family involvement tends to offset the negative effect of labor disputes on corporate performance. We examine whether specific family patterns are conducive to better labor relations. We distinguish active from passive family control, eponymous from non-eponymous family businesses, and break down family firms into founder-controlled and descendant-controlled companies. It appears that the benefits of family control are not attributable to a given type of family firm. These findings suggest that peaceful labor relationships are a peculiar attribute that families generally bring to corporations and extend our understanding of the “family effect” on organizational performance.