Abstract
Family firms constitute a substantial part of the economy and consistently exhibit higher profitability than non-family firms. While prior literature attributes this advantage to unique governance characteristics, little attention has been given to the specific mechanisms underlying superior performance. This study examines cost behavior as a potential explanation. Building on recent evidence, we argue that family firms are less prone to agency problems, managerial over confidence, and short-termism, leading them to adjust costs more cautiously and efficiently. Consequently, family firms are expected to display lower cost stickiness - or even anti-stickiness - particularly during revenue declines, there by improving resilience and profitability during economic downturns. Our findings are consistent with these predictions.
| Translated title of the contribution | On cost and ownership: asymmetrical cost behavior in family firms and its consequences |
|---|---|
| Original language | Hebrew |
| Pages (from-to) | 21-27 |
| Number of pages | 7 |
| Journal | תיאוריה ופרקטיקה בניהול |
| Volume | 11 |
| State | Published - 2026 |
IHP publications
- IHP
- Cost
- Family corporations
- Profit
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