EDITORS' NOTES.(family businesses; Germany; Middle East)(Brief Article)(Editorial)

The years following World War II gave witness to one of the most amazing transformations of the global economic power structure in world history. In Europe, Germany lay in ruins, its industry shattered by war and its territory divided by the allies. Yet, within three decades, West Germany would evolve into a world economic powerhouse.

Synonymous with manufacturing excellence and dominant market share, German corporations, including DaimlerChrysler, Siemens, Henkel, and German family businesses like BMW and Porsche have taken their place as world leaders. Despite enormous social and economic consequences, the fall of the Berlin Wall in 1990 further strengthened Germany's position as Europe's leading economy. Through it all, family businesses have been a cornerstone of this remarkable economic recovery.

During this period in the Middle East, the Gulf Region emerged as an economic juggernaut whose vast petroleum reserves are critical to the world's manufacturing and transportation needs. Accelerated by the transfer of influence from foreign multinational oil companies to local production sources, the domestic economies of the Gulf Region experienced rapid and phenomenal growth. Per capita wealth in many countries in the region soon became among the richest in the world. Yet, despite the gigantic scale of the oil industry and the engineering and construction projects built in its wake, family businesses have remained essential for private-sector growth and development in the Gulf Region.

These are exciting times for global economic forecasters as the contours of the future global economy are slowly unfolding. International cooperation has expanded with the formation of regional trading blocs and relationships such as NAFTA, MERCUSOR, the Gulf Cooperative Council, and the European Union. Along with this growing worldwide economic integration, we are seeing increasing liberalization of international trade, greater mobility of capital, and evermore rapid technology transfer. The Gulf Region companies that this issue of Family Business Review focuses on benefit from the combination of these factors as they become more international in scope and less wedded to a petroleum-based economy. Likewise, family businesses in Germany gain when they can take advantage of changing international trade patterns that allow for more effective dissemination of new technology and ready access to new markets. In a world economy characterized by free trade, deregulation, and rapid information flow, the future of fa mily businesses in these regions, and elsewhere around the world, has never been better.

In this issue, we feature some groundbreaking research into German family businesses by Sabine B. Klein of the University of Trier in Greimerath, Germany. Klein attempts to quantify the significance of family businesses to the booming German economy. Klein's data show that family businesses represent more than 30% of larger German companies valued at more than 1 billion DM. Klein also explores the unique ownership and governance structures of German family businesses along with the factors that make their management practices so special. She also suggests how laws should be structured so that the German government can nurture family businesses and encourage entrepreneurial initiatives in the future.

Our second piece on entrepreneurs in the new Germany is by David Pistrui, Harold P Welsch, Oliver Wintermantel, Jianwen Liao, and H.J. Pohl. The authors use an important study, the Entrepreneurial Profile Questionnaire (EPQ), to provide data on 160 East and West German entrepreneurs. The manuscript's intent is to isolate the differences and identify similarities between East and West German entrepreneurs. It also provides some original insights on the various sociocultural forces shaping small- and medium-size enterprises in the reunified Germany.

We also offer an exciting invited commentary by John A. Davis, Elye L. Pitts, and Keely Cormier on Gulf Region family businesses. Due to less stringent public disclosure regulations, information on companies in the Gulf Region is notoriously hard to come by. This piece sheds new light on family businesses in the countries of the Gulf Cooperative Council (GCC) by trying to determine the economic contribution of family businesses to the economies of the Gulf Region. It also looks at key challenges facing ...