Two UNC Charlotte Belk College of Business faculty researchers have used their expertise to update a groundbreaking study that aims to help policymakers better understand family-owned businesses and their impact on the U.S. economy.
Torsten Pieper and Franz Kellermanns, faculty members in the Belk College’s Department of Management, analyzed and prepared the research for the report late last year as many family businesses faced increasing uncertainty due to the global COVID-19 pandemic.
For the report, “Family Businesses’ Contribution to the U.S. Economy,” Pieper and Kellermanns first conducted a large-scale survey combined with online searches to estimate the proportion of family and non-family businesses within the overall population of firms across the United States. The survey also assessed the number of full-time employees, founding date and level of family involvement for each firm.
With this information, the researchers were able to apply varying definitions of family firms, broad, medium and narrow, depending on the level of family Influence, and validate their economic impact through IRS and U.S. Census Bureau data.
Pieper, associate professor of management, noted, “Family firms, in the broadest definition, contribute 54% of private Gross Domestic Product, or $7.7 trillion, and they are responsible for employing 59% of the private sector workforce, or 83.3 million jobs.”
Regardless of the definition used, family businesses are key pillars of the U.S. economy and essential to economic and social prosperity, the study concluded.
Pieper and Kellermanns, the Addison H. and Gertrude C. Reese Endowed Chair in International Business, said additional research is needed to better understand how family businesses affect the economy, not only domestically but globally, especially in light of the COVID-19 pandemic.
“The entire world is in the midst of a health and economic crisis that has the potential to lead to extreme policy decisions,” said Kellermanns, who recently ranked as one of the top 2% of researchers in his field in a recent study. “Up-to-date research about how family firms impact the economy may serve as a critical foundation for assessing how policy decisions, such as estate and income taxes, might have on the overall economy. Federal and state leaders should focus on supporting family businesses as key contributors to the national economy.”
Family businesses typically have a history of consistent leadership, which enable them to demonstrate greater resilience and cohesion, said Pieper, who also is among the researchers selected to participate in a global project to evaluate how family businesses are adapting to the ongoing COVID-19 pandemic.
“Families just have this natural glue which binds them together. This cohesion enables them and the family businesses to tolerate stress far more easily than other groups,” Pieper said. “It is almost paradoxical that the threat from the outside such as the pandemic can bring a family closer together, enabling little rifts to be quickly forgotten when the very survival of your livelihood is on the line.”
The 2021 update to the report was funded by Family Enterprise USA. Pieper and Kellermanns collaborated with Joseph Astrachan, professor emeritus at Kennesaw State University, to produce the new report. According to the FE USA, the report will help decision makers, regulators and legislators as they consider measures to support family-owned businesses.
Green and Gold Drive Business
The Belk College of Business at UNC Charlotte has been driving business for more than 50 years. Established in 1970, the college offers outstanding business education programs at the undergraduate, master’s, doctoral and executive levels. The Belk College is one of the Carolinas’ largest business schools, with more than 4,600 students, over 100 full-time faculty, and more than 33,000 alumni. Accredited by AACSB International, the college is committed to building strong partnerships in the greater Charlotte region and beyond as North Carolina's urban research business school. Learn more about how the Belk College is driving business at belkcollege.uncc.edu, and on LinkedIn, Facebook, Twitter and Instagram.