Family firms and geography
How important are family firms in various regions of the country?
Norway has a varied geography, with both large cities and small communities. This variation allows us to examine the role of family firms in different types of locations.
We use the classification of Norwegian municipalities into 6 categories by Statistics Norway – where 1 indicates central regions (Oslo and surrounding area), and 6 stands for the most isolated municipalities (for instance Lærdal, Nordkapp or Utsira).
Family firms represent the vast majority of firms located outside the large cities, and they are similar in size to the typical nonfamily firms in those areas.
While family firms represent the majority of firms in all regions, their prevalence increases outside the large cities:
The same pattern can be seen if we look at the absolute number of firms rather than the proportion. The absolute number of family firms decreases less compared to nonfamily firms as we move from the most to the least central areas:
Less central areas tend to have smaller firms. The decrease in firm size is quite steep for nonfamily firms – while the typical size of family firms is much more stable across various geographic areas:
Family firms tend to be more profitable than nonfamily firms across all regions – with the largest difference in the most and the least central areas:
Growth rates are generally higher in nonfamily than in family firms, but the difference is smaller in less central areas:
Family firms in less central areas have both more family and more nonfamily owners: