Employment in family firms : a study on Norwegian firms

Abstract

In this master thesis, we investigate whether employees in family firms are better off in bad times than employees in non-family firms by using a sample of Norwegian firms. We focus on implicit contracts that is argued to be more present in family firms compared to non-family firms. We fail to find evidence in support of our main hypothesis. This might be due to the fact that payroll expense is a bad proxy for implicit contracts. Other reasons might be that the distribution between family firms and non-family firms in our dataset is highly skewed or that the theory might simply not be applicable in our sample. On the other hand, we find a large difference in the intercept between boom and recession, meaning there is substantially lower payroll expenses during the recession period than the boom period. Firm size has a significant impact on the independent variable in both subsamples.