by Antony Davies
Competitive Enterprise Institute
May 23, 2014
State and local politicians often argue that governments should use tax breaks and other incentives to attract large corporations to their jurisdictions because corporations employ many people. Family-owned businesses, each of which employs few people on average, are often regarded as occupying niche markets and ignored as being of little economic significance. A cursory look at the data appears to support this view. The average non-family business with paid employees employs more than three times the number of workers as does the average family business. This, however, ignores differences in the numbers of firms. Family firms outnumber non-family firms by almost four to one, meaning that state and local government s would likely see better job growth from adopting family business-friendly policies than from seeking to tilt the playing field in favor of large firms.