Families and firms: Agency costs and labor market imperfections in Sialkot's surgical industry

• 成果类型: Article
• 署名作者: Ilias, Nauman
• 署名单位: The Brattle Group
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2005.04.007
• 发表日期: 2006
• 页码: 329-349
• 关键词: family firms; AGENCY COSTS; labor market imperfections

摘要

The family firm is generally viewed as an organizational solution to agency costs in the labor market for managers and institutional underdevelopment. Consistent with this view, this paper links the preponderance of family firms in the surgical instrument industry of Sialkot to the prevailing agency and institutional problems. However, strong dependence on family management coupled with restrictions on family size constrains the firms from optimally choosing management size. The resulting labor market distortion is manifested by a significant positive correlation between the founder's family size and the firm size such that the founders who have more brothers (a larger pool of potential managers) end up with bigger firms. V 2005 Elsevier B.V. All rights reserved.