Family firm downsizing ::identification and reputation

This article studies the relationship between corporate downsizing and family ownership. Through the lens of socioemotional wealth theory, we hypothesise that family firms downsize less than their non-family counterparts as they identify more with their firms, care about reputational damage, and take a long-term, potentially intergenerational approach. We find a significantly negative relationship between family ownership and downsizing. The effect is exerted for family firms in which the family has more control through voting rights or an active management position. Finally, companies displaying a stronger identification with the owning family or enhanced reputational concerns downsize less