The only study I am aware of that examined genetics and narcissism suggested that 64% of the variation was accounted for by genetics (Livesley WJ, Jang KL, Jackson DN and Vernon PA, Am J Psychiatry 1993 150(12):1826-1831). Of course, studies using other measures of narcissism are necessary in order to confirm or modify this figure.  Nevertheless, narcissism and narcissistic responses to stress and trauma likely have significant genetic bases�?If our children experience voicelessness during childhood, the risk of narcissism (for those predisposed), depression, and anxiety rise commensurately later in life.  However, if we can find a way to give our children “voice�?and the implicit respect that goes with it, we can lessen the chance of a generalized narcissistic response to people and the world at large.
A Note About Narcissism and Genetics Dr. Richard Grossman
http://www.voicelessness.com/narcissismgenetics.html

Question:What is the effect that a narcissist parent has on his offspring?
Answer:At the risk of over-simplification: narcissism tends to breed narcissism. Only a minority of the children of narcissistic parents become narcissists. This may be due to genetic predisposition or different life circumstances (like not being firstborn). But MOST narcissists had one or more narcissistic parents or caregivers.
Narcissistic Parents FAQ #5 By: Dr. Sam Vaknin
http://samvak.tripod.com/faq5.html