Does Family Involvement Make Firms Donate More? Empirical Evidence From Chinese Private Firms

2014 ◽  
Vol 27 (3) ◽  
pp. 259-274 ◽  
Author(s):  
Junsheng Dou ◽  
Zhongyuan Zhang ◽  
Emma Su
Keyword(s):  
Family Involvement ◽  
Stakeholder Engagement ◽  
Positive Relationship ◽  
Family Ownership ◽  
Private Firms ◽  
Socioemotional Wealth ◽  
Family Control ◽  
Charitable Donations ◽  
Dark Effect ◽  
The Impact

This article follows recent development on the socioemotional wealth perspective to examine the impact of family involvement on corporate charitable donations. Based on data collected from 2,821 Chinese private firms, we find that (a) family ownership and the duration of family control positively affect charitable donations and (b) when the next generation is unwilling to take over the business, the positive relationship between family ownership and charitable donations becomes weaker. These findings show that firms’ proactive stakeholder engagement is susceptible to family involvement. They also highlight the possible existence of the “dark” effect of certain socioemotional wealth dimensions on firms’ proactive stakeholder engagement.

Chinese Private Firms and Internationalization

2013 ◽  
Vol 27 (2) ◽  
pp. 126-141 ◽  
Author(s):  
Xiaoya Liang ◽  
Lihua Wang ◽  
Zhiyu Cui
Keyword(s):  
Family Involvement ◽  
Family Businesses ◽  
Family Ownership ◽  
Private Firms ◽  
Socioemotional Wealth ◽  
Chinese Firms ◽  
Family Control ◽  
Internationalization Strategies ◽  
Family Involvement In Management

Applying the socioemotional wealth perspective of family businesses, this study examines how family control affects whether firms tend to go international. Departing from prior research that has treated family involvement in management and family ownership as interchangeable and inseparable, we suggest that they are two different aspects of family control, which independently and differently affect firms’ internationalization strategies. A sample of private Chinese firms supports our predictions that family involvement in management has an inverted-U-shaped relationship with the likelihood of internationalization and that the percentage of family ownership has a U-shaped relationship with the likelihood of internationalization.

Family ownership and R&D investment: the moderating role of banks and private equity

2019 ◽  
Vol 57 (7) ◽  
pp. 1675-1694 ◽  
Author(s):  
Alessandro Cirillo ◽  
Mario Ossorio ◽  
Luca Pennacchio
Keyword(s):  
Family Involvement ◽  
Private Equity ◽  
Family Firms ◽  
Negative Relationship ◽  
Future Research ◽  
Family Ownership ◽  
Content Type ◽  
The Impact ◽  
The Relationship ◽  
D Investment

Purpose The purpose of this paper is to contribute to innovation and family business literature by establishing whether institutional involvement of private equity (PE) and banks in family firms moderates the relationship between family ownership and research and development (R&D) investment. Design/methodology/approach This paper used the socio-emotional wealth lens to carry out an econometric analysis on a large sample of Italian non-listed family firms. Using the sample selection model meant it was possible to account for potential selection bias arising from firms’ discretionary disclosure of R&D expenditure. Findings Family involvement in ownership reduced firms’ R&D intensity. When PE investors also held shares, the negative relationship was diverted. Bank involvement, however, did not have a significant effect on the relationship. Research limitations/implications This paper enriches the innovation management literature by increasing the understanding of the determinants of R&D investments in family firms. The results support the view that non-financial priorities in family firms are contingent upon non-family shareholders. This enriches the debate about the heterogeneity of family businesses and is consistent with the socio-emotional wealth framework, which has shown that risk preferences may vary if desired and actual performances are different. This may be a fruitful area for future research. Originality/value Contradicting the assumption that institutional owners all share the same perspective, this study is the first to assess the impact of different institutional shareholders on R&D intensity of private family firms.

scholarly journals Familiness and socioemotional wealth in Spanish family firms: An empirical examination

2017 ◽  
Vol 7 (1-2) ◽  
Author(s):  
Ismael Barros ◽  
Juan Hernangómez ◽  
Natalia Martin-Cruz
Keyword(s):  
Organizational Effectiveness ◽  
Family Involvement ◽  
Family Business ◽  
Family Firms ◽  
Family Influence ◽  
Socioemotional Wealth ◽  
Empirical Examination ◽  
The Family ◽  
Spanish Family ◽  
The Impact

The socioemotional wealth (SEW) related to emotional endowments accumulated in the business by the family, is one of the most important features that differentiate the family firms of other organizations. However, there are few studies developed in the context of the antecedents and consequences of the building and use of SEW in the family business. Therefore, this study, using a sample of Spanish family firms that are non-publicly traded, explains how family influence affects the building and use of SEW and, thus, the organizational effectiveness of the family firm. The results indicate mixed results regarding the impact of the family involvement on the essence. Those suggest a positive relationship between building and use of SEW and organizational effectiveness of the family business.

How Family Involvement in Management Affects the Innovative Behavior of Private Firms

2020 ◽  
pp. 128-152
Author(s):  
Rubén Martínez-Alonso ◽  
María J. Martínez-Romero ◽  
Julio Diéguez-Soto ◽  
Alfonso A. Rojo-Ramírez
Keyword(s):  
Family Involvement ◽  
Manufacturing Firms ◽  
Private Firms ◽  
Innovative Behavior ◽  
Socioemotional Wealth ◽  
Negative Effect ◽  
Family Involvement In Management

By taking insights from the Socioemotional Wealth theory, this chapter investigates the effect of family involvement in management on firms' innovative behavior, namely on their innovation effort. Furthermore, this research analyses whether firms are more willing to develop innovative efforts when they are engaged in technological collaborations with external partners, such as suppliers or customers. Authors used a panel dataset on 3,060 observations of Spanish manufacturing firms for the 2000–2012 period. The findings show a negative incidence of family managers on firms' innovative efforts. The empirical findings also reveal that technological collaborations with suppliers weaken the negative effect of family involvement in management on innovative effort.

scholarly journals Conflicting Selves: Family Owners' Multiple Goals and Self-Control Agency Problems in Private Firms

2018 ◽  
Vol 42 (3) ◽  
pp. 362-389 ◽  
Author(s):  
Alfredo De Massis ◽  
Josip Kotlar ◽  
Pietro Mazzola ◽  
Tommaso Minola ◽  
Salvatore Sciascia
Keyword(s):  
Control Agency ◽  
Agency Problems ◽  
Self Control ◽  
Family Ownership ◽  
Private Firms ◽  
Financial Slack ◽  
Firm Profitability ◽  
Separate Source ◽  
The Impact ◽  
The Relationship

This study examines the self–control agency problems associated with family ownership in private firms. Theorizing that family owners’ inner conflicts between economic and non–economic goals lead to competing preferences in the allocation of financial resources, we predict that the relationship between financial slack and firm profitability is contingent on factors that increase the potential salience of either economic or noneconomic goals for family owners. Accordingly, our findings suggest that self–control is a separate source of agency costs in private firms and that family ownership is not as crucial as owners’ goals in predicting the impact of financial slack on firm profitability.

scholarly journals Do family firms pay less for external funding?

2021 ◽  
pp. 031289622110182
Author(s):  
Muhammad Jahangir Ali ◽  
Seema Miglani ◽  
Man Dang ◽  
Premkanth Puwanenthiren ◽  
Mazur Mieszko
Keyword(s):  
Family Involvement ◽  
Family Firms ◽  
Jel Classification ◽  
Family Control ◽  
Listed Firms ◽  
Family Enterprises ◽  
The Cost ◽  
And Control ◽  
The Impact

We examine the impact of family control on the cost of raising external funds by family enterprises. Using a sample of Australian publicly listed firms, we find a significantly negative relation between cost of newly raised capital and family control. Moreover, we show that this relationship varies with the quality of corporate governance and the quality of firm’s information environment. Furthermore, we conduct several robustness checks and consistently find that our main results remain unchanged. Overall, our evidence suggests that family firms have easier access to external financing fostered by family involvement in the ownership and control. JEL Classification: G31; G32; M41; M42

Impact of family control on information technology investment and information technology adoption in India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Harvinder S. Mand ◽  
Gaganpreet Kaur ◽  
Amarjit Gill ◽  
Neil Mathur
Keyword(s):  
Information Technology ◽  
Family Ownership ◽  
It Adoption ◽  
It Investment ◽  
Ceo Duality ◽  
Content Type ◽  
Family Control ◽  
Empirical Results ◽  
Firm Management ◽  
The Impact

PurposeThis study tests the impact of family control on information technology (IT) investment and IT adoption in MSMEs in India.Design/methodology/approachThis study employs a survey research design. Micro, small, and medium enterprise (MSME) owners in India were surveyed to test the impact of family control on IT investment and IT adoption.FindingsOur empirical results show that family control — measured by family ownership, family member firm management, and/or family CEO duality — increases IT investment and IT adoption in India. Family ownership increases the chances of IT investment and IT adoption by 19.24% and 38.40%, respectively. Firm management by family members increases the chances of IT investment and IT adoption by 11.29% and 18.29%, respectively. CEO duality increases the chances of IT investment and IT adoption by 51.13% and 258%, respectively. Thus, CEO duality has a higher impact on IT investment and IT adoption than family ownership and firm management by family members.Research limitations/implicationsThe empirical results may be generalized only to MSMEs similar to those surveyed in this study. Additionally, this study relied on the perceptions and judgments of MSME owners.Originality/valueThis study contributes to the literature on the impact of family control on IT investment and IT adoption in the developing economics. This study can help scholars to develop further studies in the family control area. Our findings may help MSME owners to increase family control to survive and prosper into the future. Additionally, MSME management consultants may find the empirical results useful to provide consulting services.

Family control and corporate social responsibility: Evidence from Iranian companies

2017 ◽  
Vol 04 (04) ◽  
pp. 1750046 ◽  
Author(s):  
Morteza Safaee ◽  
Mehdi Safari Gerayli
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Stock Exchange ◽  
Multivariate Regression Analysis ◽  
Family Ownership ◽  
Analysis Model ◽  
Family Control ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Impact

Today, the necessity for disclosing corporate social responsibility (henceforth, CSR) to increase transparency and non-financial accountability in capital markets have attracted the attention of regulators and stock exchange. Therefore, the present study aims to investigate the impact of family ownership on CSR level. To do so, a checklist of 39 items of disclosure which accord with Iran’s reporting environment was employed to measure the social responsibility. The research hypothesis was developed based on the data collected from 98 firms listed in Tehran Stock Exchange during the years 2011–2015 and then tested using multivariate regression analysis model based on panel data. The results of the study reveal that family ownership reduces the level of CSR disclosure. The findings of current study not only fill existing gaps in the field, but also contribute to decision-making practices in Stock Exchange.

scholarly journals Impact of Shareholders’ Activism on Governance Practices and Firm Performance in Pakistan: A Response for Family Controlled Firms

2021 ◽  
Vol 3 (1) ◽  
pp. 1-12
Author(s):  
Ayesha Amjad ◽  
Sadaf Ehsan ◽  
Mariam Amjad ◽  
Seemab Gillani
Keyword(s):  
Firm Performance ◽  
Ownership Structure ◽  
Market Performance ◽  
Family Ownership ◽  
Group Affiliation ◽  
Family Control ◽  
Accounting Performance ◽  
Governance Practices ◽  
Institutional Activism ◽  
The Impact

By taking a sample of 150 non-financial firms listed on PSX, this study has empirically examined the impact of ownership structure on firm performance while considering multiple dimensions. This study employed the system GMM econometric technique to examine the association between ownership structure and firm performance. According to the computed results of the study, family ownership puts a positive and highly significant impact on the market performance of the firm. It has also found a strong and significant relationship between family control and the market value of a firm. Similarly, group affiliation and market performance of the firm have a strong and significant association but in a negative direction. Institutional ownership is significantly related to the accounting and market performance of the firm. Moreover, the joint impact of institutional and family ownership is positively and significantly related to the accounting performance of the firm. Finally, institutional activism is positively and significantly related to the accounting performance of the firm.

Impact of Family Control/Influence on Stakeholders’ Perceptions of Benevolence

2013 ◽  
Vol 26 (4) ◽  
pp. 356-373 ◽  
Author(s):  
Hannes Hauswald ◽  
Andreas Hack
Keyword(s):  
At Risk ◽  
Family Business ◽  
Group Membership ◽  
Socioemotional Wealth ◽  
Family Control ◽  
Individual Level ◽  
Category Information ◽  
Dynastic Succession ◽  
The Impact

This article proposes a model explaining how family control/influence in an organization affects individual stakeholders’ perceptions of benevolence. The model suggests two effects. First, based on socioemotional wealth research, we propose that family control/influence positively affects stakeholders’ perceptions of benevolence through the benevolent behavior that the organization shows toward its stakeholders. However, this effect can be negatively influenced if the family’s socioemotional wealth goals in terms of “Family control and influence” and/or “Renewal of family bonds to the firm through dynastic succession” are at risk. Second, we argue that family control/influence, to the extent that it is perceivable to the stakeholder, influences stakeholders’ perceptions of benevolence through categorization processes. However, the impact of perceivable family control/influence on stakeholders’ perceptions of benevolence is not straightforward but instead hinges on a set of individual-level contingency factors of the stakeholder, such as stakeholders’ family business in-group membership, stakeholders’ secondhand category information, and stakeholders’ firsthand category information.

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