The role of founder reign in explaining family firms' R&D investment: evidence from China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Xi Zhong ◽  
Tiebo Song ◽  
Liuyang Ren
Keyword(s):  
Family Firms ◽  
Negative Impact ◽  
Analytical Framework ◽  
Chinese Family ◽  
Firm Innovation ◽  
Content Type ◽  
Strategic Actions ◽  
Impact On Family ◽  
The Impact ◽  
D Investment

PurposeBased on the socioemotional wealth theory, this study aims to empirically investigate how founder reign, that is a founder serving as a cheif executive officer (CEO) or chairman, influences family firms' research and development (R&D) investment in emerging economies (e.g. China).Design/methodology/approachThis study empirically tested the hypotheses based on a sample of listed Chinese family companies from 2008 to 2018.FindingsFounder reign has a negative impact on family firms' R&D investment. Particularly, the negative impact of the founder serving as chairman on family firms' R&D investment is larger than the negative impact of the founder serving as CEO on family firms' R&D investment. Founder's military experience weakens the negative impact of founder reign on family firms' R&D investment, but founder's executive master of business administration (E)MBA experience has no moderating effect on this relationship.Originality/valueFirst, the authors contribute to the family firm innovation literature by providing an alternative but complementary explanation of why family firms have relatively low R&D investment levels. This research shows that founder reign is a key reason for family firms in China eschewing R&D investment. Second, by incorporating the founder serving as CEO and the founder serving as chairman into the analytical framework, and then examining their impact on family firms' R&D investment, our research helps us to fully understand the impact of founder reign on firm strategic actions. Third, we contribute to the “founder reign-firm strategic actions” framework by revealing how founders' human capital profoundly affects the relationship between founder reign and family firms' R&D investment.

Linking psychological ownership to employee extra-role behaviours in small overseas Chinese family businesses

2015 ◽  
Vol 7 (2) ◽  
pp. 129-147 ◽  
Author(s):  
Michael Mustafa ◽  
Hazel Melanie Ramos ◽  
Thomas Wing Yan Man
Keyword(s):  
Family Firms ◽  
Two Dimensions ◽  
Family Businesses ◽  
Psychological Ownership ◽  
Business Success ◽  
Chinese Family ◽  
Overseas Chinese ◽  
Content Type ◽  
The Impact

Purpose – The purpose of this paper is to examine the impact of psychological ownership (both job and organisational based) on extra-role behaviours among family and non-family employees in small overseas Chinese family businesses. Design/methodology/approach – Empirical evidence was drawn from a survey of 80 family owners/managers and non-family employees from 40 small overseas Chinese family businesses from the transport industry in Malaysia. All proposed hypothesis were tested using hierarchical moderated regression analyses. Findings – Job-based psychological ownership was found to significantly predict both types of extra-role behaviours. Organisational-based psychological ownership, however, was only a significant predictor of voice extra-role behaviour. Interestingly enough, no significant moderating effects on the relationships between the two dimensions of psychological ownership and two types of extra-role behaviour were found. Originality/value – Having a dedicated workforce of both family and non-family employees who are willing to display extra-role behaviours may be considered as an essential component of business success and long-term continuity for many family firms around the world. This particular paper represents one of the few empirical efforts to examine the extra-role behaviours of employees in family firms from emerging economies.

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.

Entrepreneurial decision-making and family social capital

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Cizhi Wang ◽  
Giulia Flamini ◽  
Kai Wang ◽  
Rong Pei ◽  
Chiyin Chen
Keyword(s):  
Decision Making ◽  
Social Capital ◽  
Family Firms ◽  
Family Members ◽  
Chinese Family ◽  
Content Type ◽  
Family Social Capital ◽  
The Family ◽  
Entrepreneurial Decision ◽  
The Impact

PurposeThe purpose of this paper is to adopt a collective perspective in the study of entrepreneurial decision-making processes and empirically analyse the ways in which social relationships between family members can shape their collective entrepreneurial decision-making behaviour (ED).Design/methodology/approachThis paper considers the family social capital (FSC) in inducing overall conformity to the focal family member's decision to exploit an opportunity. In terms of the seminal construct of social capital, the authors propose three FSC dimensions that can be used to induce conformity: structural, relational and cognitive dimensions. Then, the authors design questionnaires to collect data pertaining to the relationships between the family members' ED and the FSC. Finally, the authors collect 152 valid questionnaires from Chinese family firms.FindingsThe data analysis consists of two parts. The first section of this paper analyses conformity by testing the discriminant validity of models. Regression analysis is then used to test the relationship between family members' ED and the FSC. Significant relationships between the cognitive dimension of FSC and the entrepreneur's decision-making are found.Originality/valueThe research contributes towards academic literature concerning both entrepreneurship and social capital. On the one hand, this paper is one of the rare pieces of entrepreneurial research that responds to the call for the study of entrepreneurship from a collective perspective. On the other hand, our study quantitatively tests the impact of FSC at a multidimensional level. It provides conclusions regarding the social influence of other family members and provides insights into social capital by studying entrepreneurship from a social/community perspective.

Second generation involvement and corporate innovation: evidence from China

2019 ◽  
Vol 10 (4) ◽  
pp. 526-545
Author(s):  
Haijie Huang ◽  
Changjiang Lyu ◽  
Xiaowen Zhu
Keyword(s):  
Family Firms ◽  
Second Generation ◽  
Chinese Family ◽  
Least Squares Regression ◽  
Training Experience ◽  
Content Type ◽  
External Monitoring ◽  
Corporate Innovation ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this paper is to study the effect of second generation involvement on corporate innovation in Chinese family firms. Design/methodology/approach Based on the manually collected sample of listed Chinese family firms from 2003 to 2014, the study empirically examines the impact of second generation involvement on corporate innovation. The authors apply a difference-in-differences research design and a Heckman two-stage least squares regression to relieve the endogeneity concerns. Findings The research finds a positive relationship between second generation involvement and corporate innovation. This effect is more pronounced among the firms appointing second generation family members with overseas training experience and firms with weak external monitoring. Further analysis shows that the curtailment of related party transactions and the improvement of accounting information quality are important channels. Practical implications The findings provide several practical implications for Chinese family firms to survive the succession process and maintain competitive advantages across generations. Originality/value First, this study is helpful to understand the strategies adopted by family firms to maintain their long-term competitiveness and pursue continuing growth across generations. Second, the findings are also consistent with the transfer cost hypothesis of Fan et al. (2012) and Bennedsen et al. (2015). Finally, the findings imply that second generation involvement has a substitutive effect for external monitoring mechanisms.

Impact of leader adaptability on organizational change and adaptation: the case of Savecom Communication

2015 ◽  
Vol 9 (3) ◽  
pp. 213-231 ◽  
Author(s):  
Melody Seah ◽  
Ming Huei Hsieh
Keyword(s):  
Organizational Change ◽  
Family Firms ◽  
Single Case ◽  
Business Environment ◽  
Future Research ◽  
Chinese Family ◽  
Content Type ◽  
Business Context ◽  
Chinese Firm ◽  
The Impact

Purpose – This paper aims to explore the impact of leadership on organizational change and adaptability in a Chinese business context. Drawing on case data, this study seeks to uncover the factors that would predispose the leaders of Chinese family firms to initiate and implement organizational change and adaptation. Design/methodology/approach – This study is based on 16 in-depth interviews held with key informants from the case firm. Evidence is presented in the form of interview extracts. Findings – Research findings indicate that Chinese firm leaders can successfully facilitate organizational change by adapting their styles to match the changes in the business environment. Research limitations/implications – The issues identified are explored within a single case study setting, hence future research might replicate these findings to other samples or settings. Practical implications – To lead organizational change, leaders must first be able and willing to adjust their leadership styles to match the demands of their changing business environments. Originality/value – This paper adds insight to existing literature on leadership, organizational change and firm turnarounds. This paper also provides an in-depth insight into the factors that influence the leadership and management Chinese family firms.

Whose international experience matters more? Decision-makers with international experience in Chinese family firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jie Hao ◽  
Zhenzhen Xie ◽  
Kunpeng Sun
Keyword(s):  
Mergers And Acquisitions ◽  
Family Business ◽  
Family Firms ◽  
Second Generation ◽  
International Experience ◽  
Chinese Family ◽  
Content Type ◽  
Upper Echelons Theory ◽  
Cross Border ◽  
The Impact

Purpose The purpose of this study is to examine if the international experience of a family firm’s chairman, second-generation managers and other top managers all have impacts of different strengths using information about Chinese family firms’ international expansion. Design/methodology/approach Matching tactics and dynamic Heckman 2-stage analysis were applied to data on 766 publicly-listed Chinese family businesses covering 2008–2014. Findings The international experience of the chairman, second-generation family managers and other senior managers all were found to correlate with the proportion of a firm’s revenue earned abroad, as well as with the number of its cross-border mergers and acquisitions. The impact of a chairman’s international experience is stronger than the impact of the other two groups when internationalization is measured in terms of the proportion of revenue earned overseas. The second-generation managers’ international experience is the most influential when internationalization is measured in terms of the number of cross-border mergers and acquisitions. Originality/value This paper bridges agency theory with upper echelons theory in the context of the family business. The findings contribute to the scholarly understanding of family business by illuminating the mechanisms through which second-generation managers may influence family firms’ internationalization. They also enrich the knowledge of family firms in China.

Corporate Social Responsibility and Earnings Management: The Moderating Role of Family Ownership

2019 ◽  
Vol 12 (1) ◽  
Author(s):  
Asif Saeed ◽  
Aijaz Mustafa Hashmi ◽  
Attiya Yasmin Javid
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Earnings Management ◽  
Family Firms ◽  
Negative Impact ◽  
Stock Exchange ◽  
Least Square ◽  
Family Ownership ◽  
Corporate Social ◽  
The Impact

This study aims to explore the impact of family ownership on the relationship among corporate social responsibility (CSR) and earning management (EM) in Pakistan. Data is collected from nonfinancial listed firms on Pakistan Stock Exchange (PSE) for the period 2009-2017. Our results of pooled ordinary least square regression indicate that CSR has significant negative impact on EM. Furthermore, results also indicate that association between CSR and EM is moderated by family ownership. Family firms which perform CSR activities are less involved in EM as compare to nonfamily firms perform CSR activities. This variation in behavior of EM in family and non-family firms can possibly be explained by socioemotional wealth theory. Keywords: Corporate Social Responsibility, Earnings Management, Family Ownership

Impact of economic and financial crimes on economic growth in emerging and developing countries

2019 ◽  
Vol 26 (3) ◽  
pp. 910-920 ◽  
Author(s):  
Sani Abubakar Saddiq ◽  
Abu Sufian Abu Bakar
Keyword(s):  
Systematic Review ◽  
Developing Countries ◽  
Negative Impact ◽  
Meta Analysis ◽  
Eligibility Criteria ◽  
Content Type ◽  
Research Reporting ◽  
Financial Crimes ◽  
Emerging And Developing Countries ◽  
The Impact

Purpose The purpose of the study is to investigate the impact of economic and financial crimes on the economies of emerging and developing countries. Design/methodology/approach Preferred Reporting Items for Systematic review and Meta-Analysis (PRISMA) guidelines and meta-analysis of economics research reporting guidelines were used to conduct a quantitative synthesis of empirical evidence on the impact of economic and financial crimes in developing and emerging countries. Findings A total of 103 studies were searched, out of which 6 met the selection/eligibility criteria of this systematic review. The six selected studies indicated that economic and financial crimes have a negative impact in emerging and developing countries. Originality/value To the best knowledge of the authors, no published systematic review of the impact of economic and financial crimes in developing countries has been conducted to date.

Three strikes and you are out?

2017 ◽  
Vol 10 (4) ◽  
pp. 417-429 ◽  
Author(s):  
Michael Carriger
Keyword(s):  
Negative Impact ◽  
Univariate Analysis ◽  
Market Valuation ◽  
Financial Health ◽  
Content Type ◽  
Financial Measures ◽  
Significant Negative Impact ◽  
Three Strikes ◽  
Underlying Disorder ◽  
The Impact

Purpose Much has been written in both the management and finance literatures about the impact of downsizing on the financial health and market valuation of companies. However, surprisingly little attention has been paid to the frequency of downsizing and the impact of frequent downsizings. The purpose of this paper is to look at trends in downsizing, asking the question are companies that downsize once more likely to downsize again. The paper also looks at the impact of frequent downsizing, asking the question are frequent downsizers differentially impacted compared to less frequent downsizers. Design/methodology/approach Companies that appeared on the Fortune 500 in 2014 and were also on the list in 2008 were assessed for the impact of repeat downsizings on financial measures (profitability, efficiency, debt, and revenue) and market valuation. A trend analysis was conducted to assess the trend in downsizing and repeated downsizing from 2008 through 2014. A series of univariate analysis of variances were conducted to assess the impact of repeated downsizings on the financial and market valuation indicators. Findings Findings indicate that companies that downsize between 2008 and 2009 were more likely to downsize again in future years. And this repeat downsizing happened at a higher rate than would be expected by the percentage of companies that initially downsized. Findings also indicate that multiple downsizings had a significantly negative impact on the company’s financial performance as measured by two profitability ratios (return on assets and return on investment) and a borderline significant negative impact on the company’s market valuation as measured by stock equity, regardless of industry or initial financial health of the company. Originality/value Two competing theories were considered and the evidence found here support both. However, the “band-aid solution” theory, that downsizing may function as a band-aid addressing the symptoms that lead to the downsizing but not the underlying disorder or cause may be a more parsimonious explanation for the results here. It is hoped that these findings will inform both scholars and practitioners, giving both a clearer picture of the impact of multiple downsizings on corporate performance.

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