Family Firms’ Productivity in Complex Regions

Abstract Prior studies suggest that regional contexts shape family firm performance, yet evidence remains mixed, often attributed to heterogeneity among family firms and regional characteristics. Less attention has been paid to how regional economic complexity influences family firm outcome. Using a panel of more than 90,000 Swedish firms over 25 years, we examine the relationship between regional economic complexity and family firm labour productivity. The results show that family firms benefit more from economically complex regions, exhibiting significantly higher labour productivity. This advantage is likely driven by their high absorptive capacity. Overall, by introducing an economic complexity perspective, this study advances understanding of how regional environments shape family firm performance. Theoretical and practical implications are discussed.