Roots to Grow: Family Firms and Local Embeddedness in Rural and Urban Contexts

Abstract

The present study analyzes the nexus among business growth, ownership structure, and local embeddedness—that is, the involvement of economic actors in a geographically bound social structure—in rural and urban contexts. This work combines regional economics with studies on family business and firm growth and uses a coarsened matched sample of privately held Swedish firms. The findings indicate that family firms benefit more than nonfamily firms from local embeddedness and as such they achieve higher levels of growth and that this effect is more pronounced in rural areas. Research implications are shared in the Conclusion section.