Variations in the performance effects of collective turnover between family and nonfamily firms

Purpose This study aims to examine the variation in the performance effects of collective turnover between family and nonfamily firms. Design/methodology/approach This study used panel data on Korean firms from 2007 to 2017. The final firm-year observations were 2,406. Fixed-effects regression models were performed to test the hypotheses. Findings This study found that family firms suffered greater performance loss from collective turnover than their nonfamily counterparts. Furthermore, the variation in the performance effects of collective turnover between family and nonfamily firms was more pronounced in the service industry than in the manufacturing industry, and when the level of high-involvement work practices was low. Originality/value The findings offer new insights into the contextual role of family business in the turnover-performance relationship and the qualitative differences in how family firms and nonfamily firms manage their human capital.