Performance of Family and Non-family Firms with Self-Selection: Evidence from Dubai

This paper contributes to the literature on comparative performance of family and non-family businesses by accounting for self-selection and by comparing performance within and across sectors. Using an extensive data set of Dubai businesses in the four different major sectors in the Dubai economy (construction, manufacturing, services, and trading); we find that the sector matters. Family businesses outperform nonfamily businesses in trading, followed by construction as a far second. Performance of family businesses is weakest in manufacturing and services, only in trading did family businesses outperform nonfamily exporting businesses in other sectors. Reasons for that are discussed and policy implications are drawn. We also find strong evidence of self-selection bias.