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The determinants of family firms’ subcontracting: a transaction cost perspective

Research output: Contribution to Journal/MagazineJournal articlepeer-review

  • Esra Memili
  • James J. Chrisman
  • Jess H. Chua
  • Erick P.C. Chang
  • Franz W. Kellermanns
<mark>Journal publication date</mark>1/03/2011
<mark>Journal</mark>Journal of Family Business Strategy
Issue number1
Number of pages8
Pages (from-to)26-33
Publication StatusPublished
<mark>Original language</mark>English


In this article we compare the governance choices of family and non-family firms regarding their subcontracting tendencies. Based on transaction cost theory, we argue that family firms are less likely to engage in subcontracting than non-family firms and that kinship ties, the extent to which a family firm's production activities are important, and cost minimization concerns influence the extent to which family firms utilize subcontractors. Using a sample of small, established firms, we find support for our hypotheses as well as for the use of transaction cost theory logic to explain family firm behavior.