We draw on agency theory and the resource-based view to hypothesize that family and non-family businesses differ in the capital they deploy and the way they deploy it, and test this in a large UK sample of 319 family business and 258 non-family business owner/managers. We find that adverse selection, opportunism and niche marginalization is more prevalent among family business owner/managers. Yet their businesses are similar to their non-family business peers in performance outcomes such as size and growth. We suggest that weaknesses in human and financial capital choice are offset by strengths in the social capital of family firms.
- family firms