Agency costs, family ties, and firm efficiency

Abstract

In this work, we analyze agency costs and their effect on efficiency in the context of small family firms. In particular, we examine the effect that factors such as self-management, having related managers or family employees exert on firm efficiency. We offer some reasoning that may help to clarify agency problems for small firms. We use stochastic frontiers to measure and explain efficiency. Our focus is on small firms in the fishing sector, which are very important entities for the development of certain local communities