Knowledge that Transforms

We survey 153 empirical studies of family firms and document 192 operational definitions representing 25 distinct definition types. These definitions can be decomposed into five recurring, codable dimensions: ownership, management, board representation, embeddedness, and succession. We relate these dimensions to economic mechanisms including agency conflicts, residual control rights, transaction costs, and dynastic control. Alternative definitions select systematically different populations and yield materially different estimates of firm performance and innovation. Definition choice is largely unrelated to the research question, except in succession studies. Ownership thresholds track private enforcement of self-dealing rules, but not statutory shareholder rights or rule of law. We conclude that the family firm is a family of related constructs rather than a single latent construct. Definitions should therefore match the family-firm construct implied by the research question, and results should be reported across alternative classification rules.

We examine the effect of private equity buyouts on the environmental performance of U.S. fossil fuel power plants. Output-scaled CO 2 emissions are, on average, 4.2% lower after buyouts, predominantly because of fuel-saving improvements in production efficiency. Emission intensities decline more significantly following buyouts backed by pro-ESG private equity because of not only greater efficiency gains but also enhanced emission control. Our results suggest that while private equity firms are effective at implementing environmentally beneficial operational changes that also increase profitability, they do not have strong incentives to undertake environmentally beneficial changes that are privately costly, except for those with pro-ESG preferences.

We test whether loan officers discriminate against female business owners in capital decisions affecting real businesses in an Ethiopian business plan competition. Randomizing owner gender across 3,696 evaluations, by 84 loan officers, for 916 businesses, we find no effect on prize scores or consideration for a loan. Incentivized beliefs about future performance did not differ by gender, ruling out statistical and taste-based discrimination. Machine learning predictions of future business performance show that loan officers beliefs were accurate. Gender does not meaningfully improve predictions, implying no trade-off between gender equity and effective capital allocation.

What are the consequences of losing political representation in a democracy? A reform of Germany’s mixed electoral system left more than 7 million citizens in 23 constituencies without a directly elected representative after the 2025 national election. Which and how many constituencies were affected was unpredictable and quasi-random. We show that losing geographical representation reduces citizens’ satisfaction with democracy. Moreover, discontent is independent of party preferences and spreads through social networks, reducing democratic satisfaction even among individuals who were unaffected or unaware of the reform’s outcome. We conclude that political representation is a cornerstone of democracy.

This paper provides new evidence on why men and women leaders make different choices. Exploiting Brazilian close elections, we show that female mayors responded differently to the COVID-19 crisis over the year 2020. Female mayors were less likely to close non-essential businesses early in the pandemic and female-led municipalities experienced higher mortality, while the reverse was true later on. We show that these findings can be rationalized by a simple political agency model in which politicians seek re-election and voters are gender biased. Consistent with this interpretation, the gender differences we find are driven exclusively by mayors facing re-election.

This paper investigates how parental connections to firms shape early-career earnings. I use employer-employee linked data to study one important type of connection: jobs obtained at a parent’s employer. Twenty-nine percent of individuals work for a parent’s employer at least once by age 30. Exploiting transitory, firm-specific fluctuations in hiring conditions at the parent’s employer, I estimate that working for a parent’s employer increases initial earnings by 24 percent, primarily by providing access to higher-paying firms. Individuals with higher-earning parents are more likely to work for a parent’s employer and experience larger earnings gains when they do. Consequently, the elasticity of initial earnings with respect to parental earnings would be 12 percent lower if no one found a job through these connections. The findings suggest that connections to firms through one’s social network may be an important determinant of intergenerational mobility.