Priorities, Resource Stocks, and Performance in Family and Nonfamily Firms James J. Chrisman Jess H. Chua Franz Kellermanns This article discusses how the performance of family firms and nonfamily firms might differ as a result of the different priorities flowing from family influence, even when the two types of firms possess comparable levels of resource stocks. Using hierarchical regression to analyze data from a national study of the Small Business Development Center program, we find that family influence has both a positive and a negative moderating effect on the relationships between different categories of resource stocks and performance. Specifically, family firms benefit more from resource stocks based on external relationships while nonfamily firms benefit more from resource stocks based on functional skills. Introduction Recent evidence suggests that family firms outperform nonfamily firms (e.g., Ander- son & Reeb, 2003; McConaughy, Matthews, & Fialko, 2001; Miller & Le Breton-Miller, 2005); however, the exact mechanisms and processes that lead to these performance differences remain to be studied in detail. Thus, there is a growing recognition that a better understanding of how family involvement influences performance is essential for progress in the field of family business (Habbershon, Williams, & MacMillan, 2003). Of the theoretical frameworks available to explain the differences between the per- formance of family and nonfamily firms, the resource-based view (RBV) of the firm as conceptualized by Dierickx and Cool (1989), Barney (1991), and others hold particular promise (Chrisman, Chua, & Sharma, 2005; Habbershon & Williams, 1999; Habbershon et al., 2003). RBV predicts that a firm’s performance will be affected not only by the level and nature of its resource stocks but also by how the resources are deployed and exploited. Based on this, researchers (e.g., Arregle, Hitt, Sirmon, & Very, 2007; Sharma & Mani- kutty, 2005; Sirmon & Hitt, 2003) have conceptualized how family involvement may produce differences between family and nonfamily firms in terms of the level and nature Please send correspondence to: James J. Chrisman, tel.: (662) 325-1991; e-mail: jchrisman@ cobilan.msstate.edu, to Jess H. Chua at jess.chua@haskayne.ucalgary.ca, and to Franz Kellermanns at fkellermanns@cobilan.msstate.edu. P T E & 1042-2587 © 2009 Baylor University 739 May, 2009