Comparative efficiency of family and corporate farms: does family labour matter

This paper examines the comparative efficiency of family vs corporate farms. It decomposes efficiency into two distinct sources - management capabilities and organisational differences. We find evidence for organisational efficiency gains from family farming, relative to corporate farming and these appear to increase with family involvement. With regard to the management capabilities however, family farms do not compare so favourably. Furthermore family involvement does not seem to have any systematic effect on the management capabilities derived efficiency. The findings indicate that further investigation of the way family farms employ and build management capabilities is needed to substantiate any ‘superiority’ claims.