Family Firms and Labor Productivity: The Role of Enterprise-Level Bargaining in the Italian Economy

We investigate the role of Italian firms in labor productivity performance. We find that familyowned firms have lower labor productivity than their non-family counterparts. In a second step, we estimate the role of firm-level bargaining (FLB) to determine whether family-controlled firms that adopt this type of bargaining may partially close the gap in terms of labor productivity with their nonfamily competitors. Our results, obtained through IV estimation to control for endogeneity bias, suggest that enterprises under family governance achieve significant labor productivity gains—greater than those achieved by their non-family counterparts—when they adopt firm-level bargaining.