No full-text available
To read the full-text of this research,
you can request a copy directly from the author.
Influence of Family Ownership on Firm Performance: A Study of SMEs in Kabul
... Selama dua dekade terakhir, upaya ilmiah telah diarahkan pada pengembangan teori bisnis keluarga mengenai apa tujuan dan hasil perusahaan keluarga yang dapat mempengaruhi kinerja perusahaan (Razzak et al., 2019a). Berbagai peneliti telah menyatakan bahwa perusahaan milik keluarga lebih menguntungkan daripada perusahaan non-keluarga jika berdasarkan perspektif manajemen jangka panjang (Fakhry, 2021). Berdasarkan hasil survei terhadap 75 responden asal Indonesia oleh PwC global This is an Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. ...
This study was to examine family ownership, institutional ownership, managerial ownership, and foreign ownership on the performance of family firms. In addition, this study will also examine family ownership which is moderated by the independent board of commissioners and the board of directors. This study uses quantitative methods and is tested using the SPSS application and E-views. The sample in this study is a family company listed on the Indonesia Stock Exchange (IDX) for the period 2017 to 2021. The company's performance variable in this study is measured by Tobin's Q. This study will conduct three tests. The first test is all variables without moderation. The second test is family ownership which is moderated by an independent board of commissioners. The third test is family ownership which is moderated by the board of directors. The results of this study are family ownership and foreign ownership have a significant positive effect on company performance. Meanwhile, institutional ownership, managerial ownership, family ownership moderated by an independent board of commissioners, and family ownership moderated by a board of directors have an insignificant effect on company performance. The results of this study can conclude that not all share ownership can affect the performance of a company.
Purpose:
The purpose of this study is to analyze the relationship between family influence, measured through power, experience and culture (F-PEC) and family business (FB) performance. Performance is measured from a financial and non-financial perspective.
Design/methodology/approach:
Empirical study using the quantitative method and data collected through a questionnaire, answered by 169 Portuguese family firms. The survey design was based on prior research of FB performance and the F-PEC questionnaire. The exploratory factor analysis and multiple linear regression models are used.
Findings:
The results indicate a negative relationship between experience and financial performance, a positive association between a culture of family commitment and performance (financial and non-economic goals), and a positive relationship between a culture of family values and non-economic goals. The results show the importance of agreement between the firm and the family goals. Family influence on FB performance cannot be seen only from a positive (stewardship theory) or a negative (agency theory) perspective.
Originality/value:
Commitment increases financial performance and the achievement of non-economic goals (perpetuity and family assets). It is important to study how a culture of commitment leads to superior performance.
The inherent heterogeneity characterizing the universe of family firms, especially because of the existence of different family ownership “constellations,” might explain the highly inconsistent results of the effect of family ownership on internationalization outcomes. Stemming from a principal-principal perspective, the aim of this study is to understand whether and how different levels of family ownership concentration affect the degree of firms’ internationalization. We test our main hypotheses on a sample of 455 German family firms. Our main findings suggest the existence of a U-shaped relationship between family ownership concentration and the degree of a family firm’s internationalization. Furthermore, we consider the moderating effect of socioemotional wealth (SEW) and hypothesize that a higher degree of identification of family members with the firm may reduce the negative effects of an equal distribution of family ownership among family members. We find that SEW moderates the U-shaped relationship in such a way that family firms with an equal distribution of shares among the main family shareholders reach higher degrees of internationalization when the level of SEW is high.
Résumé
L’hétérogénéité inhérente à l’univers des entreprises familiales, en raison de l’existence de différentes «constellations» de propriété familiale, peut expliquer les résultats très contradictoires de l’effet de la propriété familiale sur le niveau d’internationalisation des entreprises. En utilisant la perspective « principal-principal », l’objectif de cette étude est. de comprendre si et comment les différents niveaux de concentration de la propriété familiale affectent le degré d’internationalisation des entreprises. Les hypothèses sont testées sur un échantillon de 455 entreprises familiales allemandes. Nos principaux résultats montrent l’existence d’une relation en forme de U entre la concentration de la propriété familiale et le degré d’internationalisation des entreprises familiales. De plus, nous considérons l’effet modérateur du modèle de la richesse socio-émotionnelle et affirmons qu’un degré plus élevé d’identification des membres de la famille avec l’entreprise, peut réduire les effets négatifs d’une répartition égale de la propriété familiale entre les membres de la famille. Nous constatons que la richesse socio-émotionnelle modère la relation en forme de U de manière que les entreprises familiales, à répartition égale des actions entre les principaux actionnaires de la famille, atteignent un degré d’internationalisation plus élevé lorsque le niveau de la richesse socio-émotionnelle est. élevé.
A growing body of research is concerned with how family businesses achieve competitive advantage, yet unique qualities that distinguish family firms and non-family firms are sometimes overlooked. In our study, we argue that socioemotional wealth (SEW) may trigger or limit family firms’ strategic initiatives that ultimately shape their competitive advantage. Therefore, in our study of 193 Polish family firms, we investigate how (SEW) and a firm’s competitive advantage are associated with a family firm context. Our research results reveal that, indeed, (SEW) and competitive advantage are partially associated and SEW can be regarded as an important strategic antecedent to firm performance
Purpose
The purpose of this study is to find the relationships among advanced manufacturing technology (AMT), innovation, export and firm performance by using data obtained from 310 Turkish manufacturing firms.
Design/methodology/approach
A survey study was performed to obtain data from manufacturing firms. Multiple-item scales were adapted from the literature to conduct the survey in this study. Data were collected from five cities located in the Southeastern Anatolia Region in Turkey (Gaziantep, Adiyaman, Kilis, Diyarbakir and Sanliurfa). Structural equation modeling was utilized to investigate the relationships among AMT, innovation, export and firm performance in Turkish manufacturing firms operating in several industries. The direct and indirect relations between these variables are examined in the proposed conceptual model. In addition, the complex relations including in the proposed model are assessed in detail through the mediation analysis.
Findings
Six of the proposed ten hypotheses related to manufacturers are validated by the empirical evidence from manufacturing companies in Turkey. Significant findings obtained in this study include the following: there are strong positive associations between the use of AMT and innovation and between export and firm performance. In addition, innovation mediates the relationship between AMT and firm performance and between AMT and export. Finally, export mediates the relationship between AMT and firm performance and between innovation and firm performance. It is expected that the results obtained from this empirical analysis will help decision makers and managers to construct a good technology and production management strategy for manufacturing systems.
Originality/value
In this study, a novel conceptual model is proposed to examine the relationships among AMT, innovation, export and firm performance via the use of survey responses from 310 Turkish manufacturing firms. To the authors’ best knowledge, this is the first study that proposes such a conceptual model in the literature.
By integrating literature on family functionality, family firms, and socioemotional wealth (SEW), we develop a theoretical model explaining how family functionality and SEW dimensions influence firm innovativeness. Our multigroup structural equation model on two samples of family small and medium-sized enterprises (SMEs) shows that family functionality is positively linked to SEW, whereas divergences emerge on the effect of different SEW dimensions on innovativeness. Binding social ties, the emotional attachment of family members to the firm, and the renewal of family bonds through intrafamily succession positively affect family SME innovativeness, while identification of family members with the firm has a negative effect. By deepening current understanding of the role and functionality of controlling families as determinants of their propensity to preserve SEW and achieve innovativeness, our findings offer important implications for theory and practice, paving the way for future research on SEW and family firm innovation.
Using bibliometric techniques to identify connections between existing entrepreneurship studies, this article seeks to understand the scientific structure of entrepreneurship research and how entrepreneurship scholarship is organized. Co-citation data and quantitative approach were used to identify scientific publications, intellectual structures, and research trends interrelated with theories of innovative entrepreneurship. Data were gathered from the citations and co-citations found in the Science Citation Index Expanded, Social Science Citation Index, and Arts and Humanities Citation Index. Our research reveals six groups of underlying entrepreneurship theories: (1) knowledge spillover theory of entrepreneurship, (2) creation and networks theory, (3) decision-making theory, (4) specialization of labor, (5) social entrepreneurship theory, and (6) entrepreneurship in the informal economy.
This study analyses the interaction between macroeconomic variables and indicators of small and medium enterprises (SME) in Indonesia. The analysed data include GDP, inflation, unemployment, poverty number, the number of SME business units, total SME employment, and SME investment. It uses Granger Causality Test and VECM. It suggests that macroeconomic variables and SME indicators have one causal direction. In addition, there are short term and long term relationships between macroeconomic variables and indicators of SME. The response of macroeconomic variables for indicators of SME takes 4.5-5 years to stabilize. Meanwhile, the contribution of SME to GDP indicator is likely to increase from quarter 1 to 64.
Purpose
The purpose of this paper is to examine the impact of preparation level of heirs and the relationship between family and business members on the performance of family business in small- and medium-sized enterprises (SMEs) in Malaysia.
Design/methodology/approach
A quantitative research design involving the use of a survey questionnaire was implemented to investigate the influences of succession planning factors on the performance of family business in SMEs. The survey was conducted on 50 family business successors in Malaysian SMEs.
Findings
The result showed that the two studied factors – preparation level of heirs and the relationship between family and business members – have a positive impact on the performance of family business.
Research limitations/implications
The research concentrated on the performance of family business in SMEs in Malaysia’s southern region. The generalization therefore must be made very cautiously to the overall Malaysian SMEs.
Practical implications
The findings help family businesses to better understand the importance of the preparation level of heirs and the relationship between family and business members on business performance. This study shows the importance of key factors influencing succession planning so that the successor to the family business can bring the family firm to the next stage of success.
Originality/value
This study serves as a reference or guide for the management of family businesses to better understand the important factors for effective succession planning. It considers the best possible preparation and family-related factors affecting the end results of business, particularly in Malaysian SMEs.
Abstract: Prior research has suggested that family businesses may have a higher proclivity to behave as good corporate citizens, as compared with nonfamily firms, which may impact financial performance. However, while this idea is intuitively appealing, the actual antecedents of corporate citizenship behaviour in the family firm context have not yet been assessed systematically. In addition, empirical evidence regarding the impact of citizenship behaviour on firm performance remains inconclusive. Drawing from the literature on family business goals and corporate citizenship, our conceptual framework proposes that family-centred and business-centred goals act as determinants of family firm citizenship, but each with a different impact. Furthermore, we argue that family firm reputation partially mediates the relationship between family firm citizenship behaviour and family firm performance. We discuss implications for family business research and practice and offer suggestions for future studies. Keywords: corporate citizenship behaviour; family business; firm performance; goals; reputation
The innovative capability of an organisation depends on the intellectual capital that it possesses. Our research attempts to examine the influence individual intellectual capital components have on the innovativeness and consequent growth of a company. This article proposes a classification and measurement method of intellectual capital, highlighting the following three components; human capital, organisational capital, and social capital. Our aim is to explain innovation performance and company growth by showing the importance of each intellectual capital dimension on a specific type of innovation (product, process, marketing, and organisational). To this end, a questionnaire survey was performed on 2800 Slovenian and 1700 Croatian small and medium enterprises (SMEs) in the tourism area. A data sample of 359 companies was analysed using SPSS 19 and the EQS 6 statistical programme to employ multivariate data analyses techniques through developed hypotheses.
The purpose of the paper is to develop a consistent measure of the entrepreneurs’ personal network multiplexity and to analyse its relationship to firm growth. The research goals were achieved with a quantitative approach. The data were collected with a structured questionnaire delivered to micro and small firms in Slovenia. The research results confirmed the multidimensionality of the network multiplexity concept and showed that it may influence firm growth. Entrepreneurs’ personal networks represent an important form of support during the entrepreneurial process, therefore they need to be efficiently and carefully managed by entrepreneurs.
Using a unique sample of small and medium-sized Italian firms, we investigate the effect of financial constraints on firms' participation in domestic and international supply chains. We find that firms more exposed to bank credit rationing and with weaker relationships with banks are more likely to participate in supply chains to overcome liquidity shortages. This benefit of supply chains is especially strong when firms establish long-term trading relationships and when they forge ties with large and international trading partners. To control for possible endogeneity of firms' access to credit, we construct instruments capturing exogenous shocks to the structure of the Italian local banking markets.
Using a sample of 612 listed Chinese non-SOEs from 2006 to 2009, we show that the use of collateral is higher in family-controlled firms. This effect is more pronounced when family firms have a larger control-ownership wedge, family representation in management, and are led by a descendant chairman/CEO. We further document that having multiple large shareholders, paying higher dividends, having completed the split-share structure reform and being located in provinces with more competitive credit markets can mitigate the incentive of controlling families to engage in expropriation and reduce the level of collateral required. Overall, we contend that in China, the risk of expropriation associated with family control leads to an increased credit risk and, in turn, higher collateral being required by banks.
This paper studies differences in family and non-family firms’ access to bank lending during the 2007-2009 financial crisis. The hypothesis is that the former’s incentive structure results in less agency conflict in the borrower-lender relationship. Using highly detailed data on bank-firm relations, we exploit the reduction in bank lending in Italy following the crisis in October 2008. We find statistically and economically significant evidence that credit to family firms contracted less sharply than that to non-family firms. The results are robust to observable ex-ante differences between the two types of firms and to time-varying bank fixed effects. We show, further, that the difference is related to an increased role for soft information in some Italian banks’ operations, following the Lehman Brothers failure. Finally, by identifying a match between those banks and family firms, we can control for time-varying unobserved heterogeneity among the firms and validate the hypothesis that our results are supply-driven.
This study builds on the idea that family businesses perform particularly well in the domain of exploitative innovations and explores a possible source of this strength, namely their employees’ spontaneous involvement in informal innovation activity. Specifically, we develop a mediation model on the interrelationship between family business employment and employees’ innovative work involvement. Analyses are based on a sample of 893 Belgian employees using structural equation modeling. Results suggest that family business employment is positively associated with employees’ innovative work involvement, and that part of this relationship can be attributed to their heightened perceptions of organizational support and work motivation.
This paper presents the first empirical evidence showing that the marriage of a member of the controlling family adds value to public corporations. The results, based on a uniquely comprehensive data set from Thailand, show that the family firm’s stock price increases when the partner is from either a prominent business or a political family. Abnormal returns tend to be higher for firms whose operation depends on extensive networks. In contrast, marriages to ordinary citizens are not associated with any abnormal returns. These findings are generally supportive of the value of networks in general and marriage in particular.
Small and medium enterprises (SMEs) have an important role in economic development in Indonesia. The increasing number of SMEs caused competition becomes increasingly fierce. This made SMEs experiencing more severe challenge to be able to maintain their existence and expand its business. Performance measurement for SMEs is still not well established such as the performance measurement in the big company. This paper aims to propose a conceptual framework for measuring the performance that can be used by SMEs. Several factors are proposed including entrepreneurial aspects, competence of human resource, innovativeness, and sustainability. The method used in this study are quantitative method with conduct a survey in Small and Medium Enterprises (SMEs) in Bandung. The result from this study is a conceptual framework for measuring the performance of SMEs, in which each factor has a significant correlation to the performance measurement of SMEs. This research is expected to contribute as the literature used by academics and SMEs to effectively measure SMEs performance, especially in a competitive environment.
Keywords – Small Medium Enterprises (SMEs); Performance Measurement; Conceptual Framework;
How family firms manage product innovation remains an overlooked topic in existing business
research. This happens despite the fact that family businesses play a crucial role across all
economies, and they often use technological innovation to nurture their competitive advantage. By
drawing upon the resource-based view of the firm as well as agency, stewardship, and behavioral
theories and using empirical evidence gathered through a multiple case study, the paper studies
how and why the anatomy of the product innovation process differs between family and
nonfamily firms. The analysis shows that family businesses differ from nonfamily ones as regards
product innovation strategies and organization of the innovation process.
This paper tests the impact of fi
rms' ownership structure on
firms' innovation decisions using data on 20,000 Italian manufacturers. After accounting for its possible endogeneity, we
find that ownership concentration negatively affects innovation, especially by reducing R&D effort. The analysis reveals that conflicts of interest between large and minority shareholders are a determinant of this effect. Moreover, risk aversion induced by lack of diversification exacerbates large shareholders' reluctance to innovate. Once we distinguish across types of shareholders, we find that families support innovation more than
financial institutions, but the benefits of
financial institutions increase with their equity stakes.
This paper studies the impact of the Brazilian Arranjos Productivos Locais (APL) policy, a cluster development policy, on small and medium enterprises’ (SMEs) performance. Using firm-level data on SMEs for the years 2002–2009, this paper combines fixed effects with reweighting methods to estimate both the direct and the indirect causal effects of participating in the APL policy on employment growth, value of total exports, and likelihood of exporting. Our results show that APL policy generates a positive direct impact on the three outcomes of interest. They also show evidence of short-term negative spillovers effects on employment in the first year after the policy implementation and positive spillovers on export outcomes in the medium and long term. Thus, our findings highlight the importance of accounting for the timing and gestation periods of the effects on firm performances when assessing the impact of clusters policies.
O artigo analisa a eficiência, relacionando, por meio da técnica Análise Envoltória de Dados, a estrutura de capital e o lucro operacional das empresas familiares que integram a lista das 500 maiores empresas do Brasil, conforme a revista Exame - "Melhores e Maiores de 2005". A pesquisa realizada é descritiva relacional, do tipo levantamento, com abordagem quantitativa. Das 175 empresas com controle acionário brasileiro, 59 responderam ao questionário informando serem empresas familiares, constituídas como limitadas ou sociedades anônimas. Excluídas as empresas limitadas, a amostra final restringiu-se a 39 empresas. Os resultados demonstram, com relação à estrutura de capital, que a primeira e a terceira geração utilizam mais capital próprio do que capital de terceiros. O lucro e a lucratividade são maiores na terceira geração. A Análise Envoltória de Dados indicou três empresas em cada geração como as mais eficientes. Conclui-se que, nas empresas analisadas, a terceira geração apresentou mais eficiência nas variáveis analisadas.
We present data on ownership structures of large corporations in 27 wealthy economies, making an effort to identify ultimate controlling shareholders of these firms. We find that, except in economies with very good shareholder protection, relatively few of these firms are widely-held, in contrast to the Berle and Means image of ownership of the modern corporation. Rather, these firms are typically controlled by families or the State. Equity control by financial institutions or other widely-held corporations is less common.
We investigate the relation between founding-family ownership and firm performance. We find that family ownership is both prevalent and substantial; families are present in one-third of the S&P 500 and account for 18 percent of outstanding equity. Contrary to our conjecture, we find family firms perform better than nonfamily firms. Additional analysis reveals that the relation between family holdings and firm performance is nonlinear and that when family members serve as CEO, performance is better than with outside CEOs. Overall, our results are "inconsistent" with the hypothesis that minority shareholders are adversely affected by family ownership, suggesting that family ownership is an effective organizational structure. Copyright 2003 by the American Finance Association.
By focusing on family owners’ perceptions and dynamics the aim of this paper is to understand the specific goals associated to their ownership status and whether and to what extend they impact on family firms’ growth and continuity. We use survey data on Finnish family firms and identify a set of differentiated family owners’ goals. Our findings contribute to the debate on differentiating socioemotional wealth by untangling the existence of variations in family principals’ goal setting and the importance to also consider that financial motives could determine family owners’ goals.
We argue that ownership strategies can be a double edged sword for multinational family business groups from emerging economies and the performance of their affiliates located abroad. We test an integrated framework based on internalization and agency theory on a longitudinal dataset of multinational family business groups from Taiwan. We find evidence for the contingent impact of cultural differences and family management on the association between ownership strategy and affiliate performance. While direct ownership is seen as offering more control over the affiliate, we show that this comes at a performance cost for affiliates in culturally different host countries and affiliates under family management. Indirect ownership seems to be one way to positively influence affiliate performance in culturally distant countries, but seems not to be contingent on family management utilization.
Research Summary : Building on a unique data set with information on the nuclear structure of entrepreneurial families, we integrate leadership succession into a socioemotional wealth (SEW) logic to test the antecedents and consequences of primogeniture vis‐à‐vis second‐ or subsequent‐born selection in family firm succession. Our findings suggest that appointing a family firstborn sibling is more likely when there is a high degree of SEW endowment and the family firm has pre‐succession performance below aspiration levels. Next, we find that appointing a second‐ or subsequent‐born sibling has a positive and significant effect on post‐succession firm profitability, particularly when the firm is in its second generation or later.
Managerial Summary : What drives succession choices in family firms? What are the performance implications of each succession choice? These are questions of vital relevance for every business owner. Focusing on the pool of potential family heirs at the time of succession, our study adds to the debate on the drivers of succession choices by suggesting that having a family intensive governance structure fosters primogeniture as the main succession logic, even when the family firm is experiencing lower profitability. Our study informs business owners on the implications of different succession policies, suggesting that family firms that have the courage to disregard primogeniture and choose more wisely the family successor are also the ones experiencing higher post‐succession performance.
Purpose
Drawing on the principal-principal conflict and identity literatures, the purpose of this paper is to investigate the Agency Problem Type II-bis in the context of family business. Specifically, the authors hypothesize that the size of the family owner group is related to firm growth and that this relationship is moderated by the extent to which the family identifies with the firm.
Design/methodology/approach
The hypotheses are tested on a sample of 265 medium and large German family firms (FFs) via moderated hierarchical regression analysis.
Findings
The main findings suggest that business family identity moderates the inverted U-shaped relationship between the size of the family owner group and firm growth in such a way that FFs with medium-sized family owner groups and high levels of business family identity reach higher firm growth.
Practical implications
In the context of FFs fully owned by one family, family owners might have different strategic preferences, goals, and identities, thus potentially making them subject to the conflict that could arise among the different family owners in relation to growth expectations. Recognizing this problem could help family owners find potential solutions to ensure the well-being of both the family and the business.
Originality/value
The combination of family ownership structure and family ownership dynamics affects firm growth. Challenging the homogeneity of the family owner group, the authors highlight the role of Agency Problem Type II-bis in hindering growth of FFs. A finer-grained view of principal-principal conflicts in FFs is thus discussed.
The aim of this article is to investigate whether family control, family management and family ownership concentration affect the investment-cash flow sensitivity of small- and medium-sized enterprises (SMEs). By analysing a sample of Italian SMEs for the period 2004–2013, I find that family-owned businesses are significantly associated with higher investment-cash flow dependence. This relation, however, is found to be driven by two distinct factors: (i) the presence of a highly concentrated family ownership (ownership concentration channel) and (ii) the active involvement of the family in the business (family management channel).
Ownership in a family business can be a rewarding and important role. It means stewardship, protection and nurturing the family business. As a guide for shareholders, this book will developing understanding and insight into the role of becoming more valuable as an owner, not just financially, but intellectually and emotionally as well. It aims to provide the philosophical foundation that will support the decisions owners make about technical and legal issues and to help all shareholders understand how to be constructive in their roles. Ownership ought to be an interesting, challenging, profitable, and spiritually enriching experience.
Purpose
The purpose of this paper is to investigate the relationship between family ownership and the performance of Brazilian companies listed on BM&FBovespa. It also provides a comparison with the results of Shyu’s (2011) survey conducted in Taiwanese companies.
Design/methodology/approach
A sample of 187 Brazilian companies were surveyed, of which 120 were classified as family owned, considering the family participation in the capital and in the board of directors. As in Shyu’s (2011) study, three variables of performance, two of accounting and one of market, and seven variables of control were considered. Simultaneous equations were used to analyze the relationship between family participation and corporate performance, the test of mean was used to compare performance and other variables between family- and non-family-owned companies, and a graphical analysis was used to verify the extent to which family involvement contributes to better performance.
Findings
The results show that family-owned companies have lower performance compared with non-family-owned companies. They indicate a positive relationship between family participation (ownership) and performance of the company. They also reveal that the performance of family-owned companies is maximized when family involvement reaches 60 and 70 percent.
Originality/value
The survey conducted on Brazilian companies shows results that are partially consistent with those observed by Shyu (2011) in Taiwanese companies. Similarities were found in the relationship between family involvement and the performance of the company. However, the results differ with regard to the performance of family- and non-family-owned companies and the optimal level of family participation that can maximize performance.
Family (FFs) and non-family firms (NFFs) are increasingly shown to be distinct in their operations, including their marketing-related resources, decisions, and actions pertaining to innovation. The current research explores the possibility that while some drivers of innovativeness – radical innovativeness, in particular – may be common to both family and NFFs, how these drivers combine to produce radical innovativeness may not always be the same for these two firm types. Data from 1671 firms operating in four countries were analyzed using fuzzy set qualitative comparative analysis. Results reveal six configurations of behavioral proclivities and/or resources that predict radical innovativeness, including two that are unique to FFs, three that are unique to NFFs, and one that is common to both firm types.
The aim of this research is to study the moderating role of family management in the relationships between the intensity of research and development and the occurrence of continuous technological innovation and between the existence of technological innovation outcomes and long-term firm performance. The results show that family management reduces efficiency in the conversion of research and development expenses into technological innovation outcomes over time. Our findings also suggest that the influence of family management significantly contributes to improving the effect of the achievement of technological innovation on long-term performance.
This paper analyzes whether interpersonal trust affects the agency costs of family-controlled firms’ debt. Our results are threefold. First, we find that banks apply a discount to the interest rates charged to family firms, whose size decreases considerably for contracts stipulated in high-trust areas. Second, as a response to the (unexpected) liquidity shock affecting the interbank market in August 2007, banks further increased the discount associated with family control. Third, we have no evidence of lender-corruption effects since the ex-post performance of the (cheaper) loans extended to family firms is superior to that of their peers. These results suggest that banks deem the incentive structures prevailing in family firms to be able to attenuate the higher risks of expropriation run by lenders in areas where agency conflicts are greater, due to lack of interpersonal trust. Our findings are robust to the self-selection and omitted local variable problems as well as to credit demand-side effects. We model family control as an endogenous choice, introduce local-level fixed effects and use the heterogeneous exposure of Italian banks to the 2007–09 financial crisis − and the fact that Italian firms have more than one lender − to fully absorb changes in credit demand schedules.
The 4Cs model of command, continuity, community, and connections is useful for examining the effect of family influence on the adoption of discontinuous technologies. However, assuming that family influence differs only in degree rather than kind is naive because such an assumption ignores the likelihood of heterogeneous behaviors among family firms. In this conceptual note, we extend prior work and explain how heterogeneity in the family's relative emphasis on command, continuity, community, and connections requires that the multifaceted and potentially nonlinear nature of family influence be considered when analyzing strategic decisions concerning family firm innovation.
This paper studies whether relationship lending mitigates the transmission of the Lehman default shock to the supply of credit in Italy. Exploiting the presence of multiple banking relationships, we control for banks’ and firms’ unobserved characteristics. Results show that the growth of credit itself is higher and its cost lower the shorter the distance between the bank and the firm, the longer the relationship and the higher the share of credit held by the bank. Credit growth by relationship lenders is 4.6 percent higher than that by transactional lenders; the increase in the cost of credit is 50 basis points lower. The positive effect of relationship lending on credit supply increased during the crisis, compared to a pre-crisis period. The beneficial effect of relationship lending is weaker if the relationship lender is more exposed to the�financial crisis, especially when lending to weaker
borrowers.
In an empirical investigation of 532 Finnish firms, and using the entrepreneurial orientation (EO) literature to frame our arguments, we demonstrate that relationships among proactivity, risk-taking and innovation output differ in family and non-family firms. Specifically, we find evidence that risk-taking does not affect innovation output in family firms, whereas in non-family firms, innovation output is increased through risk-taking. Also, proactive family firms influence their innovation output more positively than proactive non-family firms do. This study adds important new insights to the growing knowledge of EO, which are discussed in the following for both academic and business audiences.
This study provides an exploratory analysis of differences between family and non-family firms in innovation investment, product and process innovation outcomes, and labor productivity. Using data from the Community Innovation Survey on 2,087 German small- and medium-sized enterprises (SMEs), we observe significant disparities at each stage of the innovation process. Whereas family SMEs have a higher propensity to invest in innovation at all, conditional on investing in innovation, these companies do so less intensively than their non-family counterparts. Family SMEs further tend to outperform non-family SMEs in terms of process innovation outcomes when controlling for innovation investment. Given the level of product and process innovation, however, family SMEs underperform regarding labor productivity in comparison to non-family SMEs. These findings complement previous empirical research by illustrating how the presence of a dominant family relates to innovation inputs and outputs of SMEs in Europe’s largest economy and its innovative SME sector.
This article identifies 25 articles that have been particularly influential in shaping the state of the art of research on family businesses. These works were identified based on a citation analysis of family business articles published over the past 6 years in the four journals that publish most of the research. The authors summarize those influential studies and discuss their most important contributions to scholars' current understanding of family business. By identifying common themes among those studies, the authors are able to provide directions for future research in the field.
We examine how corporate transparency and financing choices differ for family and non-family firms in the S&P 1500 Index. While transparency on average is better for firms in the S&P 500 Index than for firms in the S&P MidCap 400 and S&P SmallCap 600 indices, the improvement is much larger for family firms. Outside the S&P 500, family firms are less transparent than their non-family counterparts, whereas the opposite is true for firms in the S&P 500 Index. Family firms outside the S&P 500 Index have shorter debt maturity and higher debt ratios than large family firms (in the S&P 500) as well as non-family firms. These results on firms’ financial choices are consistent with the notion that small family firms prefer opacity and enjoy control benefits at the cost of over-reliance on “monitored finance”, while other firms, especially the large family firms, prefer transparency and the lower cost of external finance.
Family firms play an important role in today's global economy. However, limited empirical research has identified factors that spur these firms' internationalization. Highlighting the altruism that pervades family firms, this exploratory study examines the individual and interactive effects of family ownership and involvement on subsequent internationalization of a firm's operations. Results from the analyses of 409 U.S. manufacturing firms show that family ownership and involvement in the firm as well as the interaction of this ownership with family involvement are significantly and positively associated with internationalization. The implications of the findings for research and managerial practice are discussed.
This paper analyses the effect of family ownership on performance in an emerging economy. Two dimensions represent family ownership: ownership concentration and characteristics of family control (i.e. family involvement in the board of directors). The study also includes the effect of firm institutional relatedness on performance, meaning the degree of informal embeddedness or interconnectedness with dominant institutions. The empirical analysis uses a data set of publicly traded Chilean firms from 2000 and 2003. The evidence indicates that performance depends on ownership concentration and that family control and institutional relatedness also have a significant effect.
This paper empirically examines how family-controlled firms perform in relation to firms with nonfamily controlling shareholders in Western Europe. The sample consists of 1672 non-financial firms. Active family control is associated with higher profitability compared to nonfamily firms, whereas passive family control does not affect profitability. Active family control continues to outperform nonfamily control in terms of profitability in different legal regimes. Active and passive family control is associated with higher firm valuations, but the premium is mainly due to economies with high shareholder protection. The benefits from family control occur in nonmajority held firms. These results suggest that family control lowers the agency problem between owners and managers, but gives rise to conflicts between the family and minority shareholders when shareholder protection is low and control is high.
We analyze the ultimate ownership and control of 5,232 corporations in 13 Western European countries. Typically firms are widely held (36.93%) or family controlled (44.29%). Widely held firms are more important in the UK and Ireland, family controlled firms in continental Europe. Financial and large firms are more likely widely held, while non-financial and small firms are more likely family controlled. State control is important for larger firms in certain countries. Dual class shares and pyramids enhance the control of the largest shareholders, but overall there are significant discrepancies between ownership and control in only a few countries.
Different product-market strategies have different requirements for success. Just as organizational structures and processes are tailored to assist in implementing a chosen strategy, so too should the performance emphases adopted by a firm. The logic of this approach underlies the reason why many managers have adopted a balanced scorecard approach to measuring performance. But balance implies that all measures are equally important in all settings. The authors endorse the multi-measure approach to understanding company performance, but challenge the idea that all measures are equally important irrespective of the product-market strategy adopted. The results from a survey of more than 200 businesses support this position.
Afghanistan's National Export Strategy
Afghanistan Ministry of Industry and Commerce. (2018). Afghanistan's National
Export Strategy 2018-2022.
Tipo de orientación familiar y prácticas de dirección y gobierno
- R Basco
Basco, R. (2010), "Tipo de orientación familiar y prácticas de dirección y gobierno.