While these patterns may reflect simple nepotism, and the historical review
by Bellow (2003) suggests that possibility, other interpretations are also possible.
If there is an intergenerational transmission of firm-specific skills, then children
inherit human capital that has a higher return when they are employed by
the family firm. In this sense, the intergenerational transmission of employers
might be interpreted as another reflection of the transmission of skills and traits
valuable for labor market outcomes. But the decline of firm performance upon
the succession of a family member would seem to suggest that family members
do not on average have a distinctly more valuable set of skills or managerial
talent.