This study builds its premise on conflicting arguments regarding why family firms are likely to be more or less socially responsible than non-family firms. Comparing the corporate social performance data of 261 firms (59 family firms and 202 non-family firms) from the S&P 500 during the years 1991-2000, the findings suggest that family firms are likely to be more socially responsible actors than the non-family firms in order to protect their image and reputation.

This study is an attempt to answer the question, `Are family firms more likely to be socially responsible than their non-family counterparts?' It draws on existing literature to build up the hypothesis, and then tests them empirically using data of 261 companies collected for a period of 10 years.

The paper starts with discussing the concept of Corporate Social Performance (CSP), which is the variable being studied. CSP suggests that as members of the society, the firms have the obligation to be economically and socially responsible citizens and act in publicly responsible ways. The paper refers to earlier researches, which have identified two dimensions along which a firm's CSP maybe measured. While the first dimension is `Social Initiatives', which refers to the proactive measures firms undertake, like giving to charity; the second dimension is `Social Concern', which refers to measures taken by a firm to avoid issues of social concern like employee problems, environmental problems, etc.

The issue whether family firms are likely to be more socially responsible is a matter of contention, with contradicting theories proposed by earlier researchers. According to one group, family firms are less likely to be socially responsible. Their argument is that for family firms, self interest comes first, and so they are more likely to give bribes, encourage nepotism and so on.

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