The Perseverance of Family Firms : Performance Threshold and Firm Survival

Research on family firm survival has been mixed as studies provide evidence both for a positive and negative effect of family ownership on firm survival. Drawing upon threshold theory and socioemotional wealth we develop hypotheses which link family owners’ socio-emotional wealth and performance threshold to entrepreneurial exit. Using the longitudinal Kauffman Firm Survey we find that family firms are less likely to exit compared to non-family firms and that this relationship is mediated by owners’ threshold of performance.