Are female leaders more efficient in family firms than in non-family firms?

AuthorPer-Olof Bjuggren, Louise Nordström, Johanna Palmberg
Publication Date03 Apr 2018
Are female leaders more efcient in family
rms than in non-family rms?
Per-Olof Bjuggren, Louise Nordström and Johanna Palmberg
Purpose The aim of this studyis to investigate whether female leaders are moreefficient in family firms
than in non-familyfirms.
Design/methodology/approach This paper uses a uniquedatabase of ownership and leadership in
private Swedish firms that makes it possible to analyze differences in firm performance due to female
leadership in family and non-family firms. The analysis is based on surveydata merged with micro-level
data on Swedish firms. Only firms with fiveor more employees are includedin the analysis. The sample
containsmore than 1,000 firms.
Findings The descriptive statistics show that there are many more male than female corporate
leaders. However, the regression analysis indicates that female leadership has a much more
positive impact on the performance of family firms than on thatfor non-family firms, where the effect
is ambiguous.
Originality/value Comparative studies examining the impact of female leadership on firm-level
performance in family and non-family firms are rare, and those tha t exist are most often either
qualitative or focused on large, listed firms. By investigating the role of female directors in family and
non-family firms, the study adds to the literature on management,corporate governance and family
Keywords Gender, Family firms, Corporate governance, Company performance,
Financial performance
Paper type Research paper
1. Introduction
Traditionally, women in family firms have roles that are closely linked to the family, i.e.
spouse, mother or in-law, instead of a prominent and formal business-related position, such
as CEO or CFO. These roles have traditionally been more closely associated with male
family members (Arjis, 2013). However,the literature on family firms indicates that the role of
women in these firms is changing. Women have become more visible and more
incorporated into family businesses. A more positive vibe surrounds women’s opportunities
and the possibilities offered to them by a family firm in terms of career opportunities,
management positions and leadership(Gupta and Levenburg, 2013;Jimenez, 2009).
Empirical studies on female corporateleadership exist, but the results are unclear and need
more investigation. For example, Adams and Ferreira (2009) find an ambiguous effect of
female directors on firm performance, and Dezso
¨and Ross (2012) report that female
leadership is beneficial in some contexts. Most previous studies investigate large listed
firms, with very few examining smaller non-listed firms. Systematic empirical research on
women in family firms is even scarcer and requires further analysis[1]. One area that has
been examined is how female leaders function in family firms and what their obstacles are
(Danes and Olson, 2003;Gnan and Songini, 2013;Jimenez, 2009). However, studies that
link female ownership with leadershippositions are missing.
Per-Olof Bjuggren is
Professor at Centre for
Family Enterprise and
Ownership, Jo
International Business
School, Jo
University, Jo
Sweden and The Ratio
Institute, Stockholm,
Sweden. Louise Nordstro
is Associated with
Department of Economics,
¨ping University,
¨ping, Sweden.
Johanna Palmberg is
Associate Professor,
Research Director and
Senior Lecturer at Swedish
Entrepreneurship Forum,
Stockholm, Sweden and
Department of Economics,
¨rn University,
Huddinge, Sweden.
Received 27 January 2017
Revised 20 June 2017
Accepted 18 August 2017
DOI 10.1108/CG-01-2017-0017 VOL. 18 NO. 2, 2018, pp. 185-205, © Emerald Publishing Limited, ISSN 1472-0701 jCORPORATE GOVERNANCE jPAGE 185
To fill this gap and to extend our knowledge on women in family firms, this paper
investigates the effects of women in managerial positions, as members of the board of
directors and as owners of the firm on firm-level profitability. A special focus is on family-
owned enterprises. The following research question addresses the issue of female
governance on firm performance:
RQ1. Is the effect of female governance different in family firms compared with that in
non-family firms?
This study relates to recent researchon female leadership in family firms. A study by Amore
et al. (2014) appears to resemble our study the most. They have adopted a similar
approach to ours, but it differsin important aspects: they study only family firms, theydo not
compare family with non-family firms and they do not consider female ownership. Their
hypotheses are grounded in a theoretical framework that posits that female directors and
leaders function better in cooperation with the same sex. By contrast, we also stress
discrimination as an important explanation.
The paper makes empirical and practical contributions to the literature on family firms and
to the corporate governance literature in general. Our main empirical contribution is our
investigation of the effect of female corporate leaders on firm performance and our
comparison of this effect between family and non-family firms. The empirical analysis is
based on survey data with firms in all size classes and at least five employees, i.e. listed
and non-listed firms are included. Firm owners were asked for the names of the five largest
owners and for their respective cash flows and voting rights; they were also asked whether
they considered themselves to be a family firm or a non-family firm. In total, 1,041 firms
completed the survey, which corresponds to a response rate of 42 per cent. The survey
data are matched with firm-level data from Bureau van Dijk’s Amadeus database and with
information on female leaders from officialsources.
The regression analysis shows that female executives generate higher profitability in family
firms than they do in non-family firms. Our results indicate that promoting women to leading
positions is good for firms. That is, the results suggest that family firms can improve their
profitability by supporting and mentoring female family members to take leading positions.
The creation of regional and national networks is onepolicy suggestion that not only aims to
further support female leaders but also couldenhance firm performance.
The remainder of the paper is organized as follows. The next section presents the
theoretical framework, an overview of the previous literature and the tested hypotheses.
The third section discusses the methodology and the data and variables. Section 4
presents the relevant descriptive statistics and the regression analysis. The final
section summarizes and concludes the paper.
2. Female leadership literature review and research questions
Research on gender issues is relatively new within the corporate governance/finance
literature (Huang and Kisgen, 2013). No coherent theoretical framework captures all
aspects of gender and the ways in which it can affect firm performance. Instead, one must
rely on a mixture of theories about behavioral differences related to gender, discrimination
and the principal–agent relationship as well as to the proposed advantages of gender
diversity on the board. After reviewing this literature, we claim that the difference between
family firms and non-family firms must be acknowledged when considering the effects of
gender on firm performance.
2.1 Gender differences in top management
Jensen and Meckling (1976) provide a corporate governance framework based on a
principal–agent view. The central message in their article is that corporate leaders (those

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