Family Ties, Social Capital and Small Businesses' Efficiency. Evidence from the Italian Food Sector

We investigate whether technical efficiency is affected by family involvement in management, considering a sample of small and medium sized firms (SMEs) operating in the traditional manufacturing sector. A positive and significant relationship between family management and efficiency is found when adopting one-step procedures based on Stochastic Frontier Analysis (SFA). Furthermore, according to our results, local social capital seems to moderate the influence of the family involvement on the performance of firms, corroborating the idea that trust and reputational assets associated with family ties can compensate for the lack of cooperative behaviour and social networks characterizing some communities where firms operate.