Did you know that the success and growth of your family business matters to many people? In fact, your country’s economy may depend on it.

Statistics show that family businesses are predominant throughout the world (López de Silanes, La Porta, & Shleifer, 1999) and contribute the most to the growth of worldwide economies. For more details, read Family Firm Institute’s Global Data Points article.

A recent study by Memili et al. (2015) examines the impact of the prevalence of Family Small and Medium-Sized Enterprises (SMEs) on economic growth at the state level in the USA. It suggests that the proportion of Family Small and Medium-Sized Enterprises (SMEs) will have an inverted U-shaped relationship with economic growth. Stated differently, there is an optimum level of Family Small and Medium-Sized Enterprises (SMEs) in a local economy. Up to that point, which is about 42.8 % of the Small and Medium-Sized Enterprises (SMEs) population, an increasing proportion of family firms have a positive influence on economic growth. However, beyond that point, more and more family firms in the economy appear to reduce economic growth.

Lesson #1: A balanced combination of family and non-family Small and Medium-Sized Enterprises (SMEs) is more conducive for maximizing economic growth than either type of business. Therefore, your family business plays an active part in promoting your country’s economy.

To review the full Top Ten Family Business Facts by Rania Labaki and to access a list of original resources, please visit our Family Business Facts page.

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