What Causes Differences in Family Business Performance? A Composite Model of Family Business Characteristics
Mária Režňáková, Pavla Srbová, Michal Karas, Jan Pěta
Keywords:
family business, socioemotional wealth theory, compound variable, confirmatory factor analysis, financial performance, linear mixed-effects model
Abstract:
Family businesses typically place an emphasis not merely on financial goals, but also on preserving family values, maintaining family ownership, ensuring long-term survival and meeting social obligations, i.e., non-financial goals. This can lead to differences in their competitiveness and performance. Therefore, we focused on creating a compound variable that would allow us to quantify the differences between family businesses arising from their ownership and management structure, as well as from different family values. We simplify the measurement of the influence of socioemotional wealth on business performance using data from Central and Eastern Europe. Confirmatory factor analysis was used to create this variable. To verify the influence of family on the performance of family businesses, we created a linear mixed-effects model. The model was created based on the accounting data of micro, small, and medium-sized enterprises, which have a greater tendency to preserve family values. We measured performance by return on equity, and we used a derived compound variable, financial ratios, and other control variables as independent variables. We concluded that family relationships and socially responsible business influence the performance of family businesses. Moreover, in the interaction model, we demonstrated that the influence of the family is moderated by asset turnover and labour costs.
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 10.7441/joc.2026.02.02
Režňáková, M., Srbová, P., Karas, M., & Pěta, J. (2026). What Causes Differences in Family Business Performance? A Composite Model of Family Business Characteristics. Journal of Competitiveness 18(2), 38–64. https://doi.org/10.7441/joc.2026.02.02
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