Socially responsible downsizing: Comparing family and non-family firms

This study seeks to investigate whether family firms are more likely to downsize their workforce than their non-family counterparts. Drawing on socioemotional wealth approach, we first explore the effect of family presence on workforce downsizing. Furthermore, we examine the moderating role of R&D activity on the family presence-downsizing relationship. Our sample covers a panel of manufacturing SMEs in Spain over the 1993-2014 period. We find that family firms are less likely to downsize than non-family firms. Our results also reveal a negative association between R&D activity and workforce downsizing. Finally, the relationship between family presence and downsizing is contingent upon R&D activity, that is, family firms engaged in R&D activities are less likely to downsize than non-innovative family firms.