Economics area

Riccardo Camboni
Bidding on price and quality: An experiment on the complexity of scoring rule auctions
Review of Economics and Statistics

We experimentally study procurement auctions when both quality and price matter. We compare two treatments where sellers compete on one dimension only (price or quality), with three treatments where sellers submit a price-quality bid and the winner is determined by a scoring rule that combines the two offers. We find that, in the scoring rule treatments, e ciency and buyer's utility are lower than predicted. Estimates from a Quantal Response Equilibrium model suggest that increasing the dimension of the strategy space imposes a complexity burden on sellers, so that a simpler mechanism like a quality-only auction may be preferable.

Martina Miotto
Welfare cuts and crime: evidence from the New Poor Law
The Economic Journal

The New Poor Law reform of 1834 induced dramatic and heterogeneous reductions in welfare spending across English and Welsh counties. Using the reform in a difference-in-differences instrumental variables strategy, we document a robust negative relationship between the generosity of welfare provision and criminal activity. Results are driven by non-violent property crimes and are stronger during months of seasonal agricultural unemployment, highlighting the particularly criminogenic combination of welfare cuts and precarious work opportunities for the economically vulnerable.

Giovanni Pellegrino
Does risk matter more in recessions than in expansions? Implications for monetary policy
Journal of Monetary Economics

We employ a nonlinear vector autoregression and a non-recursive identification strategy to show that an equal-sized uncertainty shock generates a larger contraction in real activity when growth is low (as in recessions) than when growth is high (as in expansions). An estimated New Keynesian model with recursive preferences replicates these state-contingent responses when approximated to third order around its risky steady state due to a stronger upward nominal pricing bias in recessions than in expansions. Empirical evidence supports this state-contingent channel, and we show that it can greatly reduce the ability of systematic monetary policy to stabilize output during recessions.

  Accounting / Management area

Andrea Bafundi
Economists’ Political Donations and GDP Forecast Accuracy
European Accounting Review

We examine the association between economists’ political donations and the accuracy of Gross Domestic Product (GDP) forecasts. Prior research suggests that individual political donations reflect personal political orientations, leading to a partisan bias. Therefore, economists might not objectively interpret information, with a subsequent reduction in GDP forecast accuracy. Using a sample of onequarter-ahead US GDP growth forecasts for 2003–2020, we find that economists making political donations are more accurate than their peers. This result suggests that despite the potential partisan bias, individual political donations give economists an information advantage in predicting GDP growth. We also document that the informational benefits associated with donations are stronger when the political party financed by economists controls both the Senate and House of Representatives. However, these benefits are reduced in periods of uncertainty and when the economists’ forecasting houses are more politically active
 
Chiara Burlina
Economic complexity and firm performance in the cultural and creative sector: Evidence from Italian provinces
European Urban and Regional Studies

Several studies have detected a positive relationship between the spatial dynamics of cultural and creative industries (CCIs) and their social and economic outcomes. In this article, we draw upon the Economic Complexity Index (ECI) as a proxy to capture the social interactive nature that characterises CCIs and the way this affects firm performance. Our assumption is that more complex locations, endowed with different types of more sophisticated production capabilities, allow CCI firms to perform more strongly. This can depend on the higher opportunities of complex knowledge sharing and cross-fertilisation processes among different types of CCI firms or with non-CCI firms. The focus is on Italy, a country with a long-standing historical tradition in culture and creativity. We draw upon an original panel database at firm and province level (for the period 2010–2016) to compute two different ECIs, one for the CCIs and another one for the rest of the economy. Moreover, we analyse the effects these two types of complexity on the performance of firms within sectors with different levels of cultural and commercial value. We find that economic complexity of CCIs but not economic complexity of the rest of the economy matters for CCI firm performance. However, the effect is relatively weak. The same finding applies to all CCI firms, irrespective of their type of sector. Policy implications and directions for future research are discussed.
 
Marco Ghitti
What’s in a shade? The market relevance of green bonds’external reviews
The British Accounting Review

With the growth of green bonds as an asset class, the certification of the actual climate footprint of projects financed with these bonds is gaining momentum among investors and policymakers. We investigate the informative content of Second Party Opinions (SPOs) issued by external reviewers who assess the quality of green bonds by collecting a global sample of over 1200 corporate green bonds and analyzing matching results for 336 of them. We show that the market assigns a premium to the green bonds with the best SPOs’ valuation - namely, the “dark-” and “medium-” green bonds. However, in presence of a formal credit rating, SPO external reviews do not appear to incorporate distinctive information priced by the market. Using a difference-in-difference approach, we find that stricter green investment regulations, like the adoption of the “EU Taxonomy,” produce a “fly-to-quality” effect that widens the spread between dark and lighter green bonds’ returns. Responsible investors also appear to rely on the judgement of external reviewers when a formal credit rating is absent, and they have significantly higher stakes in the greener bonds. Overall, our results indicate that SPO external reviews can reduce information asymmetry between issuers and investors absent of a credit rating, but they are not informative for rated green bonds.

  Winners

For the Economics area the winners are:

Riccardo Camboni
Bidding on price and quality: An experiment on the complexity of scoring rule auctions
Review of Economics and Statistics

We experimentally study procurement auctions when both quality and price matter. We compare two treatments where sellers compete on one dimension only (price or quality), with three treatments where sellers submit a price-quality bid and the winner is determined by a scoring rule that combines the two offers. We find that, in the scoring rule treatments, e ciency and buyer's utility are lower than predicted. Estimates from a Quantal Response Equilibrium model suggest that increasing the dimension of the strategy space imposes a complexity burden on sellers, so that a simpler mechanism like a quality-only auction may be preferable.

Martina Miotto
Welfare cuts and crime: evidence from the New Poor Law
The Economic Journal

The New Poor Law reform of 1834 induced dramatic and heterogeneous reductions in welfare spending across English and Welsh counties. Using the reform in a difference-in-differences instrumental variables strategy, we document a robust negative relationship between the generosity of welfare provision and criminal activity. Results are driven by non-violent property crimes and are stronger during months of seasonal agricultural unemployment, highlighting the particularly criminogenic combination of welfare cuts and precarious work opportunities for the economically vulnerable.

Giovanni Pellegrino
Does risk matter more in recessions than in expansions? Implications for monetary policy
Journal of Monetary Economics

We employ a nonlinear vector autoregression and a non-recursive identification strategy to show that an equal-sized uncertainty shock generates a larger contraction in real activity when growth is low (as in recessions) than when growth is high (as in expansions). An estimated New Keynesian model with recursive preferences replicates these state-contingent responses when approximated to third order around its risky steady state due to a stronger upward nominal pricing bias in recessions than in expansions. Empirical evidence supports this state-contingent channel, and we show that it can greatly reduce the ability of systematic monetary policy to stabilize output during recessions.

For the Accounting/Management area the winner is:

Marco Ghitti
What’s in a shade? The market relevance of green bonds’external reviews
The British Accounting Review

With the growth of green bonds as an asset class, the certification of the actual climate footprint of projects financed with these bonds is gaining momentum among investors and policymakers. We investigate the informative content of Second Party Opinions (SPOs) issued by external reviewers who assess the quality of green bonds by collecting a global sample of over 1200 corporate green bonds and analyzing matching results for 336 of them. We show that the market assigns a premium to the green bonds with the best SPOs’ valuation - namely, the “dark-” and “medium-” green bonds. However, in presence of a formal credit rating, SPO external reviews do not appear to incorporate distinctive information priced by the market. Using a difference-in-difference approach, we find that stricter green investment regulations, like the adoption of the “EU Taxonomy,” produce a “fly-to-quality” effect that widens the spread between dark and lighter green bonds’ returns. Responsible investors also appear to rely on the judgement of external reviewers when a formal credit rating is absent, and they have significantly higher stakes in the greener bonds. Overall, our results indicate that SPO external reviews can reduce information asymmetry between issuers and investors absent of a credit rating, but they are not informative for rated green bonds.

  Economics area

Riccardo Camboni
"Purchasing medical devices: The role of buyer competence and discretion"
Journal of Health Economics 

This paper investigates the price variability of standardized medical devices purchased by Italian Public Buyers (PBs). A semiparametric approach is used to recover the marginal cost of each device. Average prices vary substantially between PBs; we show that most of the difference between the purchase prices and estimated costs is associated with a PB fixed effect, which, in turn, is related to the institutional characteristics and size of the PB. Repeating the main estimation using device fixed effects yields similar results. Finally, an exogenous policy change, i.e. the termination of the mandatory reference price regime, is used to assess how discretion affects medical device procurement given the skills of each PB. Our results show that less PB discretion — i.e. when mandatory reference prices apply — determines efficiency gains and losses for low- and high-skilled PBs, respectively.

Francesco Campo
"Talents and cultures: Immigrant inventors and ethnic diversity in the age of mass migration"
Journal of the European Economic Association

We investigate the importance of co-ethnic networks and diversity in determining immigrant inventors’ settlements in the United States by following the location choices of thousands of them across counties during the Age of Mass Migration. To do so, we combine a unique United States Patent and Trademark Office historical patent dataset on immigrants who arrived as adults with Census data and exploit exogenous variation in both immigration flows and diversity induced by former settlements, WWI, and the 1920s Immigration Acts. We find that co-ethnic networks play an important role in attracting immigrant inventors. Yet, we also find that immigrant diversity acts as an additional significant pull factor. This is mainly due to externalities that foster immigrant inventors’ productivity.

Chiara Dal Bianco
"Disability insurance and the effects of return-to-work policies"
Review of Economics Dynamics

I provide a quantitative assessment of the labor market and welfare effects of return-to-work policies targeted at disability insurance (DI) recipients. I do so by estimating a life-cycle model in which individuals with different health evolving over time choose consumption, labor supply, and DI application. I find that a wage subsidy incentivizing return to work is welfare improving, and the willingness to pay for such reform is increasing in sickness and decreasing in wealth. This policy increases labor force participation of DI beneficiaries by 4.6 percentage points, and decreases the DI rate by 5.7 percentage points. A policy mandating a 10% yearly eligibility reassessment would decrease the welfare of individuals in bad health and poor economic condition, and force about 30% of the beneficiaries to exit the program, 54% of whom would return to work.

  Accounting / Management area

Anna Alexander
"Do institutional donors value social media activity and engagement? Empirical evidence on Italian non-profit grantees."
The British Accounting Review

The paper examines whether social media activity and engagement of non-profit organizations affect the financial support received from institutional donors and their relationship with the latter. Data are collected using a survey of non-profit grantees that received at least one grant from a Foundation of Banking Origin (FBO) in the Italian context, and are supplemented with social media (i.e., Facebook and Twitter) data on grantees. The results show that grantees with higher social media activity and engagement receive a larger amount of funding from the FBO. Moreover, grantees that report higher social media engagement are subject to less constraining oversight by the FBO. In additional analyses, we find that the beneficial effect of social media activity is driven by accountability-related content consistent with social media allowing for a more informal and dialogic accountability. Overall, our results provide novel evidence on the role of online sources of information, such as social media, on the grantor-grantee relationship and contribute to the recent debate on the importance of promoting digital transformation and stakeholder engagement in non-profits.

Giuseppe Danese
"Pledging one’s trustworthiness through gifts: An experiment"
Judgement and Decision Making

Ethnographers have recorded many instances of tokens donated as gifts to attract new partners or strengthen ties to existing ones. We study whether gifts are an effective pledge of the donor’s trustworthiness through an experiment modeled on the trust game. We vary whether the trustee can send a token before the trustor decides whether to transfer money; whether one of the tokens is rendered salient through experimental manipulations (a vote or an incentive-compatible rule of purchase for the tokens); and whether the subjects interact repeatedly or are randomly re-matched in each round. Tokens are frequently sent in all studies in which tokens are available, but repeated interaction, rather than gifts, is the leading behavioral driver in our data. In the studies with random pairs, trustors send significantly more points when the trustee has sent a token. Subjects in a fixed matching achieve comparable levels of trust and trustworthiness in the studies with and without tokens. The trustee’s decision to send a token is not predictive of the amount the trustee returns to the trustor. A token is used more sparingly whenever salient — a novel instance of endogenous value creation in the lab.

Amir Maghssudipour
"The role of multiple ties in knowledge networks: Complementarity in the Montefalco wine cluster"
Industrial Marketing Management

After decades of studies about pervasive, wide, and inclusive knowledge externalities and the advantages of being there, recent literature on management, industrial marketing, economic geography, regional studies, and related fields has stressed that knowledge spreads imperfectly, unevenly, and selectively within regional and cluster contexts. In this respect, little is known about the role played by heterogeneous knowledge ties among the same set of actors and to what extent they follow overlapping or different routes of exchanging knowledge. Thus, an investigation of multiple knowledge networks in clusters is a fundamental approach to interpret the reasons for innovation and economic performance.

With an original dataset comprised of data collected by surveys directly administered in local wineries in the Montefalco wine region of Italy, this paper aims to analyse the roles played by different local knowledge ties within a sector that is critically driven by the exchange of knowledge among economic actors. Social network analysis and exponential random graph modelling were applied to investigate the driving forces of the knowledge flows. The empirical results showed that economic and social ties positively affect the spread of knowledge, but the former has a higher magnitude impact than the latter. Moreover, they follow complementary routes of exchange rather than overlapping ones. We suggest that such a structure has implications for understanding the diffusion of knowledge and structures of innovation in cluster contexts.

  Winners

For the Economics area the winners are:

Francesco Campo
"Talents and cultures: Immigrant inventors and ethnic diversity in the age of mass migration"
Journal of the European Economic Association

We investigate the importance of co-ethnic networks and diversity in determining immigrant inventors’ settlements in the United States by following the location choices of thousands of them across counties during the Age of Mass Migration. To do so, we combine a unique United States Patent and Trademark Office historical patent dataset on immigrants who arrived as adults with Census data and exploit exogenous variation in both immigration flows and diversity induced by former settlements, WWI, and the 1920s Immigration Acts. We find that co-ethnic networks play an important role in attracting immigrant inventors. Yet, we also find that immigrant diversity acts as an additional significant pull factor. This is mainly due to externalities that foster immigrant inventors’ productivity.

Chiara Dal Bianco
"Disability insurance and the effects of return-to-work policies"
Review of Economics Dynamics

I provide a quantitative assessment of the labor market and welfare effects of return-to-work policies targeted at disability insurance (DI) recipients. I do so by estimating a life-cycle model in which individuals with different health evolving over time choose consumption, labor supply, and DI application. I find that a wage subsidy incentivizing return to work is welfare improving, and the willingness to pay for such reform is increasing in sickness and decreasing in wealth. This policy increases labor force participation of DI beneficiaries by 4.6 percentage points, and decreases the DI rate by 5.7 percentage points. A policy mandating a 10% yearly eligibility reassessment would decrease the welfare of individuals in bad health and poor economic condition, and force about 30% of the beneficiaries to exit the program, 54% of whom would return to work.

For the Accounting/Management area the winners are:

Anna Alexander
"Do institutional donors value social media activity and engagement? Empirical evidence on Italian non-profit grantees."
The British Accounting Review

The paper examines whether social media activity and engagement of non-profit organizations affect the financial support received from institutional donors and their relationship with the latter. Data are collected using a survey of non-profit grantees that received at least one grant from a Foundation of Banking Origin (FBO) in the Italian context, and are supplemented with social media (i.e., Facebook and Twitter) data on grantees. The results show that grantees with higher social media activity and engagement receive a larger amount of funding from the FBO. Moreover, grantees that report higher social media engagement are subject to less constraining oversight by the FBO. In additional analyses, we find that the beneficial effect of social media activity is driven by accountability-related content consistent with social media allowing for a more informal and dialogic accountability. Overall, our results provide novel evidence on the role of online sources of information, such as social media, on the grantor-grantee relationship and contribute to the recent debate on the importance of promoting digital transformation and stakeholder engagement in non-profits.

Amir Maghssudipour
"The role of multiple ties in knowledge networks: Complementarity in the Montefalco wine cluster"
Industrial Marketing Management

After decades of studies about pervasive, wide, and inclusive knowledge externalities and the advantages of being there, recent literature on management, industrial marketing, economic geography, regional studies, and related fields has stressed that knowledge spreads imperfectly, unevenly, and selectively within regional and cluster contexts. In this respect, little is known about the role played by heterogeneous knowledge ties among the same set of actors and to what extent they follow overlapping or different routes of exchanging knowledge. Thus, an investigation of multiple knowledge networks in clusters is a fundamental approach to interpret the reasons for innovation and economic performance.

With an original dataset comprised of data collected by surveys directly administered in local wineries in the Montefalco wine region of Italy, this paper aims to analyse the roles played by different local knowledge ties within a sector that is critically driven by the exchange of knowledge among economic actors. Social network analysis and exponential random graph modelling were applied to investigate the driving forces of the knowledge flows. The empirical results showed that economic and social ties positively affect the spread of knowledge, but the former has a higher magnitude impact than the latter. Moreover, they follow complementary routes of exchange rather than overlapping ones. We suggest that such a structure has implications for understanding the diffusion of knowledge and structures of innovation in cluster contexts.

  Economics area

Riccardo Camboni
"Purchasing medical devices: The role of buyer competence and discretion"
Journal of Health Economics 

This paper investigates the price variability of standardized medical devices purchased by Italian Public Buyers (PBs). A semiparametric approach is used to recover the marginal cost of each device. Average prices vary substantially between PBs; we show that most of the difference between the purchase prices and estimated costs is associated with a PB fixed effect, which, in turn, is related to the institutional characteristics and size of the PB. Repeating the main estimation using device fixed effects yields similar results. Finally, an exogenous policy change, i.e. the termination of the mandatory reference price regime, is used to assess how discretion affects medical device procurement given the skills of each PB. Our results show that less PB discretion — i.e. when mandatory reference prices apply — determines efficiency gains and losses for low- and high-skilled PBs, respectively.

Chiara Dal Bianco
"The effect of work disability on the job involvement of older workers" 
Journal of Economic Behavior and Organization

This paper analyzes the effect of work disability on the job involvement of workers living in Europe. We exploit objective health indicators and anchoring vignettes to enhance the comparability across individuals. Individuals’ evaluations of their health-related work limitations are found to be mildly affected by justification bias but to depend on individual heterogeneity in reporting behaviour. Work disability significantly reduces the job involvement of workers.

Giuseppe Danese
"One person’s trash is another person’s treasure: In search of an efficient property regime for waste in the Global South"
Water Management

Empirical work conducted by an NGO shows that laws about access to waste are a central concern for waste pickers in the Global South. I show in this paper that any property regime that tries to exclude the waste pickers from accessing waste is associated with high transaction costs. I defend the thesis that the res nullius (no one's property) regime, complemented by waste pickers' organizations, regulates the waste sector efficiently in the Global South.

Edoardo Grillo
"Economic and social-class voting in a model of redistribution with social concerns"
Journal of the European Economic Association

We investigate how social status concerns affect preferences for redistribution. Social status is given by an individual's relative standing in two dimensions: consumption and social class. Redistribution modifies the weights of these two dimensions. As a result, some members of the working class may oppose redistribution, while some members of the socio-economic elites may favor it. This increases polarization concerning redistributive policies and gives rise to interclass coalitions of voters that, despite different monetary incentives, support the same tax rate. 

Leonardo Madio/Francesco Principe
"Do-It-Yourself medicine? The impact of light cannabis liberalization on prescription drugs"
Journal of Health Economics

Governments worldwide are increasingly concerned about the booming use of CBD (cannabidiol) products. However, we know little about the impact of their liberalization. We study a unique case of unintended liberalization of a CBD-based product (light cannabis) that occurred in Italy in 2017. Using unique and high-frequency data on prescription drug sales and by exploiting the staggered local availability of the new product in each Italian province, we document a significant substitution effect between light cannabis and anxiolytics, sedatives, opioids, anti-depressants and anti-psychotics. Results are informative for regulators and suggest that bans on light cannabis use would disregard the needs of patients to seek effective reliefs of their symptoms.

Alessia Russo
"Youth Enfranchisement, Political Responsiveness, and Education Expenditure: Evidence from the US" 
American Economic Journal: Economic Policy 

We examine the link between the political participation of the young and fiscal policies in the United States. We generate exogenous variation in participation using the passage of preregistration laws, which allow the young to register before being eligible to vote. After documenting that preregistration promotes youth enfranchisement, we show that preregistration shifts state government spending toward higher education, the type of spending for which the young have the strongest preference.

  Accounting / Management area

Simone Carmine
"Reviewing Paradox Theory in Corporate Sustainability Toward a Systems Perspective"
Journal of Business Ethics

Paradox theory has recently emerged as a promising way to approach the complexity of corporate sustainability. However, the fuzziness in the empirical use of the concept of “paradox” and the absence of a systems perspective limits its potential. In this paper, we perform a systematic review of the empirical literature related to paradox and sustainability. Our analysis provides a comprehensive account of the uses of the construct - which allows the categorization of the literature into three distinct research streams: 1) paradoxical tensions, 2) paradoxical frame/thinking, and 3) paradoxical actions/strategies. Further, by adopting a system perspective, we propose a theoretical framework that considers possible interconnections across the identified paradoxical meanings and different levels of analysis and discuss key research gaps emerging.

Ambra Galeazzo
"Organizational and Perceived Learning in the Workplace: A Multilevel Perspective on Employees’ Problem Solving"
Organization Science

This research draws attention to the multilevel role of learning on employees’ systematic problem solving (SPS) behavior, which aims to prevent the recurrence of a problem.  We highlighted that learning occurs through the organizational and perceived mechanisms of knowledge articulation and knowledge codification. Compared to organizational knowledge articulation (OKA) and knowledge codification (OKC), learning captured through the perceived mechanisms of knowledge articulation (PKA) and knowledge codification (PKC) supposes employees take an active part in the learning processes and interpret them differently. Employing a multilevel structural equation modeling on a sample of 383 shop floor employees in 52 plants, our findings indicate that OKC affects SPS, while OKA affects OKC. Moreover, results show that both PKA and PKC have strong positive effects on SPS. This study expands the understanding of the role of problem solving in routine evolution.

Alessandra Tognazzo
"Family Business Leaders’ Metaphors and Firm Performance: Exploring the “Roots” and “Shoots” of Symbolic Meanings" 
Family Business Review

To investigate the complex dynamics when family members with differing perceptions and interpretations of reality jointly lead their family business, this research adopts an epistemic-operative interview technique using Morgan’s images of organization. We explore how family leaders’ root metaphors, which are symbolic frames that help understand individuals’ attitudes and behaviors, are linked to family businesses’ behavior and performance. Analyzing six Italian family hotels, we derive four structures of family symbolic meanings and explain how and why relationships and innovation are mechanisms through which firm performance is related and connected to the offshoots of the meanings of family leaders’ root metaphors.

  Winners

For the Economics area the winners are:

Alessia Russo
"Youth Enfranchisement, Political Responsiveness, and Education Expenditure: Evidence from the US" 
American Economic Journal: Economic Policy 

We examine the link between the political participation of the young and fiscal policies in the United States. We generate exogenous variation in participation using the passage of preregistration laws, which allow the young to register before being eligible to vote. After documenting that preregistration promotes youth enfranchisement, we show that preregistration shifts state government spending toward higher education, the type of spending for which the young have the strongest preference.

Edoardo Grillo
"Economic and social-class voting in a model of redistribution with social concerns"
Journal of the European Economic Association

We investigate how social status concerns affect preferences for redistribution. Social status is given by an individual's relative standing in two dimensions: consumption and social class. Redistribution modifies the weights of these two dimensions. As a result, some members of the working class may oppose redistribution, while some members of the socio-economic elites may favor it. This increases polarization concerning redistributive policies and gives rise to interclass coalitions of voters that, despite different monetary incentives, support the same tax rate. 

For the Accounting/Management area the winners are:

Ambra Galeazzo
"Organizational and Perceived Learning in the Workplace: A Multilevel Perspective on Employees’ Problem Solving"
Organization Science

This research draws attention to the multilevel role of learning on employees’ systematic problem solving (SPS) behavior, which aims to prevent the recurrence of a problem.  We highlighted that learning occurs through the organizational and perceived mechanisms of knowledge articulation and knowledge codification. Compared to organizational knowledge articulation (OKA) and knowledge codification (OKC), learning captured through the perceived mechanisms of knowledge articulation (PKA) and knowledge codification (PKC) supposes employees take an active part in the learning processes and interpret them differently. Employing a multilevel structural equation modeling on a sample of 383 shop floor employees in 52 plants, our findings indicate that OKC affects SPS, while OKA affects OKC. Moreover, results show that both PKA and PKC have strong positive effects on SPS. This study expands the understanding of the role of problem solving in routine evolution.

Alessandra Tognazzo
"Family Business Leaders’ Metaphors and Firm Performance: Exploring the “Roots” and “Shoots” of Symbolic Meanings" 
Family Business Review

To investigate the complex dynamics when family members with differing perceptions and interpretations of reality jointly lead their family business, this research adopts an epistemic-operative interview technique using Morgan’s images of organization. We explore how family leaders’ root metaphors, which are symbolic frames that help understand individuals’ attitudes and behaviors, are linked to family businesses’ behavior and performance. Analyzing six Italian family hotels, we derive four structures of family symbolic meanings and explain how and why relationships and innovation are mechanisms through which firm performance is related and connected to the offshoots of the meanings of family leaders’ root metaphors.