Family firms, Regional Competitiveness and Productivity: A Multilevel Approach

As not all firms benefit to the same extent from regional competitiveness, this article investigates the influence of the regional context on the productivity of a sample of family and non-family manufacturing firms in Spain. Using a multilevel approach to account for the nested structure of the data, and a composite indicator of regional competitiveness, to capture the spatial endowment of tangible and intangible resources, we found family firms to be more sensitive to the regional context than non-family businesses. Cross-level interactions show that family firms achieve higher productivity gains from their location in more competitive regions than their non-family counterparts. This result is in line with our theoretical arguments postulating the unique social capital of family firms which allows them to benefit most from location advantages. Implications for regional and family business studies, as well as policymakers, are discussed.