Abstract

The crucial role of family SMEs in promoting regional development has not always been recognized. Up to 40% of medium-sized firms are family-owned in Europe (La Porta et al., 1999), however; the regional distribution is uneven, with the regional effects of intergenerational transmission of self-employment and family business remaining under-researched. This paper reviews the regional concentration of family workers and the self-employed as opposed to the average firm size (index of local units/persons employed – based on data derived from Regional Structural Business Statistics) at the European level. It is hypothesized that substantial added value disappears at NUTS2 level as a result of failures in the family business cycle (and consequently succession problems). In this hypothetical schema, maturing entrepreneurs who grow their ventures in a decade and often succeed in enlarging them to include family workers end up in a position of being unable to pass down their business to the new generation, and thus are bought-out by large firms after several decades of work.

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