Strategic determinants of performance of family businesses in the USA and Canada

Abstract

The research explores the relationship among accounting-based performance indices measured in terms of return on assets (ROA), return on equity (ROE), and return on investment (ROI), and market-based performance indices, Tobin's Q, market value, and sales growth in the USA and Canadian family-based businesses. Through the traditional OLS regression analysis, it was confirmed that the firm size, advertising intensity, capital intensity, current ratio, labour productivity, and the firm's age are most likely to have a significant and positive impact on marketing performance indices. Additionally, strategic factors like firm size, capital intensity, current ratio, and labour productivity are statistically significant in determining accounting-based performance measure while R&D intensity (except ROA and ROE), debt leverage, and firm's age are not statistically significant in indicating its accounting performance. The results have a broad implication for managers in family businesses to build a competitive advantage for their organisation.