Firm Resilience During Oil Price shocks: Norwegian Family and Non-Family Firms

Abstract

We study resilience in Norwegian limited liability companies highly affected by the oil price shock in 2014. We analyze whether family firms are more resilient than non-family firms in terms of profitability, financial vulnerability, and investment decisions following the oil price shock in 2014. We found that family and nonfamily firms perform significantly different during the event window between 2014 and 2016. Our findings suggest a family firm premium of 1.5pp for ROA and 69pp for TIE, respectively. We further found that family firms are less affected by the shock than non-family firms in terms of change in profitability and financial vulnerability in the period after the shock. Our Difference-In-Difference regressions show that family firms have a positive and significant average treatment effect, suggesting better resilience.