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Authors – E22 – Rodrigo Basco – Family firms in European regions: the role of regional institutions

Our study investigates whether the quality of regional institutions influences firms’ likelihood of being a family firm. We explore our conjecture using the EU-EFIGE/Bruegel-UniCredit dataset, which provides comparable cross-country data on manufacturing firms in seven European countries. We use a multilevel framework to analyse how firm- and regional-level variables influence firms’ likelihood of being a family firm. We find evidence that location matters in explaining firms’ probability of being a family firm but that differences between countries are more relevant than are differences between regions. Our results show that the lower the quality of regional institutions, the higher the likelihood of a firm being a family firm. Our results are robust to alternative regional-level control variables and persist after several robustness checks.

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