Family-owned businesses dominate the economic landscape in the United States: Between 70 and 90 percent of all firms in America are owned or controlled by families. They generate 62 percent of the country’s employment and 78 percent of all job creation, recent data show.
In 2017, Tsoutsoura became academic director of the Smith Family Business Initiative, which conducts research and provides classes, conferences, and roundtables on the challenges and opportunities of working with family-owned companies. The establishment of the initiative in 2014 was the major reason Tsoutsoura joined the faculty at Cornell, after teaching at the University of Chicago for seven years.
“It was a great opportunity to have the resources for research on family and private firms at Cornell,” says Tsoutsoura.
A native of Athens, Greece, Tsoutsoura grew up working for her father’s small business – a gymnasium – on weekends with her entire family. “It was nonstop involvement and constant thinking about it, with all the family involved to save money on hiring employees,” she says.
While earning her Ph.D. at the Columbia University Graduate School of Business, Tsoutsoura focused her dissertation research on the impact inheritance taxes have on family businesses in Europe. It is more difficult to study family firms in the U.S., Tsoutsoura says, because data on privately held businesses is scarce. One recently available source that allows observation of private firms’ data is controlled by the Internal Revenue Service, which only gives access to a limited number of researchers every two years. Tsoutsoura has applied, along with collaborators, to use its data for a project focusing on how the gig economy interacts with more traditional entrepreneurs.
Tsoutsoura believes the Smith Family Business Initiative will continue to generate groundbreaking research, new courses, and opportunities to interact with business owners, attract students and engage alumni. “For Cornell, it’s a great way for us to distinguish ourselves as a business school,” she says, “and make this a unique point on which the school provides insight and thought leadership.”
Excerpted from Faculty Spotlights, Ezra Magazine, May 2019. Written by Sherrie Negrea.