Birth mode of family firms, family entering time and R&D investment: evidence from China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Zulfiqar ◽  
Shihua Chen ◽  
Muhammad Usman Yousaf
Keyword(s):  
Agency Theory ◽  
Family Firms ◽  
Family Firm ◽  
Research Database ◽  
Content Type ◽  
Firm Birth ◽  
The Relationship ◽  
D Investment ◽  
Moderating Role

PurposeOn the basis of behavioural agency theory and resource-based view, this study investigates the influence of family firm birth mode (i.e. indirect-established or direct-established), family entering time on R&D investment and the moderating role of the family entering time on the relationship between birth mode and R&D investment.Design/methodology/approachThe authors collected 2,990 firm-year observations from family firms listed on A-share in China from 2008 to 2016 in the China Stock Market and Accounting Research database. They used pooled regression for data analysis and Tobit regression for robustness checks.FindingsIndirect-established family firms show more inclined behaviour towards R&D investment than direct-established counterparts. Family entering time positively affects the R&D investment of family firms. Moreover, family entering time plays a significant moderating role in the relationship between family firm birth mode (i.e. indirect-established or direct-established) and R&D investment.Originality/valueTo the best of the authors’ knowledge, this work is a pioneering study that introduced the concept of family firm birth mode (i.e. indirect-established or direct-established) and family entering time. This work is novel because it differentiated family firms according to their birth modes, an approach which is a contribution to the existing literature of family firms. Moreover, the investigation of the moderating role of family entering time has also produced notable results that help understand the impact of family entering time on different types of family firms. The interpretation of outcomes according to behavioural agency theory also produced useful insights for future researchers as well as for policymakers.

Family ownership and cooperative R&D: the moderating effect of political ties

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Feng Dong ◽  
Xiao Wang ◽  
Jiawen Chen
Keyword(s):  
Family Firms ◽  
Family Ownership ◽  
Content Type ◽  
Political Ties ◽  
Wealth Concentration ◽  
The Impact ◽  
The Relationship ◽  
Moderating Role ◽  
Ability And Willingness

Purpose This study aims to investigate the impact of family ownership on cooperative research and development (R&D). Drawing on the ability and willingness paradox framework in family business research, the authors suggest that family ownership influences cooperative R&D via two opposing mechanisms: power concentration and wealth concentration. It also deepens the current understanding of the boundary conditions of informal institutions for the impact of family ownership on cooperative R&D by investigating the moderating role of political ties. Design/methodology/approach The authors analyze a panel of 610 Chinese manufacturing family firms and 2,127 firm-year observations from 2009 to 2017. Fixed effects regression analysis is used to test the hypotheses, with the two-stage Heckman model to address sample selection bias. Findings The research findings indicate that family ownership has an inverted U-shaped relationship with cooperative R&D and political ties moderate the relationship in such a way that the inverted U-shaped relationship will be steeper in firms with more political ties than in firms with fewer political ties. Practical implications Family ownership influences firms’ cooperative R&D through the positive effect of power concentration and the negative effect of wealth concentration. Family owners should, therefore, take advantage of concentrated power, for instance, by adapting quickly and committing sufficient resources to cooperative R&D opportunities, while controlling path-dependent relationship development caused by concentrated family wealth. The effect of political ties on the relationship between family ownership and cooperative R&D is found to be a double-edged sword. Originality/value This study extends the ability and willingness paradox framework and provides novel insights into cooperative R&D in family businesses by integrating power concentration and wealth concentration associated with family ownership. Moreover, this study provides a contingency perspective and introduces the moderating role of political ties in shaping cooperative R&D in family firms.

Do women perform better in family firms?

2017 ◽  
Vol 29 (3) ◽  
pp. 299-315 ◽  
Author(s):  
Antonio D’Amato
Keyword(s):  
Firm Performance ◽  
Family Firms ◽  
Gender Diversity ◽  
Family Firm ◽  
Campania Region ◽  
Content Type ◽  
Novel Approach ◽  
Panel Data Regression ◽  
Moderating Role

Purpose Empirical evidence on the relation between female involvement at the head of a company and firm performance remains inconclusive. This study aims to disentangle the existing evidence by exploring the moderating role of family firm status. Design/methodology/approach The study analyzes the moderating role of family firm status on the relation between gender diversity and firm performance among a sample of 88 Italian wine firms from Campania region during the 2007-2014 period. This work uses random effects panel data regression and tests the robustness of the results using alternative econometric techniques. Performance is measured in terms of profitability. Findings The findings reveal that women in top positions do not affect firm performance. However, it is found that this relation is significantly moderated by family firm status. Specifically, compared to high family-controlled firms, female involvement negatively impacts firm performance in low family-controlled firms. Research limitations/implications From a theoretical standpoint, the results enable a more nuanced interpretation of the relationship between female involvement and firm performance. From a managerial perspective, the results highlight conditions that may promote the role of women in business. Originality/value This paper provides insights into the relation between gender diversity and firm performance by exploring the moderating role of family firm status – a novel approach in the management and wine business literature.

Performance aspiration, industrial search and R&D investment among chinese firms

2017 ◽  
Vol 11 (2) ◽  
pp. 270-283 ◽  
Author(s):  
Yiyi Su ◽  
Taoyong Su
Keyword(s):  
Investment Decision ◽  
Business Leaders ◽  
Ongoing Research ◽  
Content Type ◽  
Behavioral Determinants ◽  
Investment In China ◽  
The Relationship ◽  
D Investment ◽  
Moderating Role

Purpose This paper aims to examine the behavioral determinants of firm research and development (R&D) investment in China by looking into the interaction between performance aspiration and industrial search. Design/methodology/approach The author argues that the performance aspiration effect is strengthened in R&D-intensive industries based on the isomorphism rationale, whereas it is weakened by high industry R&D intensity owing to the differentiation rationale. Deriving from the isomorphism and differentiation rationales, the author developed a set of competitive hypotheses and empirically tested them by using a large panel data of 6,539 company-years from China for the period 2001-2003. Findings First, R&D intensity is positively related to the deviation of firm performance from aspiration. Second, industry R&D intensity negatively moderates the relationship between performance aspiration and firm R&D intensity for firms performing above aspiration. Therefore, the results provide support for the differentiation rationale. Originality/value The study contributes to the ongoing research that provides and tests the behavioral explanations for R&D and innovation. By delving into the moderating role of industry R&D intensity, the author advocate the need for contextualizing performance aspiration in industrial environments. The study informs policymakers and business leaders about the interaction between the external environment and internal decision process in R&D investment decision.

scholarly journals Does CEO power matter for the performance of retrenchment strategy?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rayenda Khresna Brahmana ◽  
Hui Wei You ◽  
Maria Kontesa
Keyword(s):  
Firm Performance ◽  
Agency Theory ◽  
Ceo Power ◽  
Resource Based View ◽  
Content Type ◽  
Emerging Country ◽  
The Relationship ◽  
Circulation Theory ◽  
Moderating Role

PurposeThis research aims to examine the moderating role of CEO power on the relationship between retrenchment strategy and firm performance by framing the relationship under an agency theory, and power circulation theory.Design/methodology/approachThis study focuses on a sample of 319 non-financial public listed companies in Malaysia from the year 2011–2016 and estimates the model under two-step GMM panel regression to eliminate the endogeneity issue.FindingsThe results show that the retrenchment strategy increased firm performance. Meanwhile, greater CEO power changes that retrenchment effect into increased performance. This study also indicates the CEO power strengthens the relationship between firm performance and retrenchment. However, CEO power does not have any effect on the performance of low retrenchment, and the performance of big firm size.Research limitations/implicationsThe findings show that the higher CEO power cause higher firm performance and higher retrenchment. This research suggests that CEO power can make retrenchment strategy works and the decision made can affect the firm performance significantly.Originality/valueThis study examines the effect of CEO power on the performance of retrenchment strategy implementation by contesting agency theory, power circulation theory, and resource-based view theory within the emerging country context.

Revisiting the financial performance – corporate social performance link

2018 ◽  
Vol 30 (7) ◽  
pp. 2586-2602 ◽  
Author(s):  
Serin Choi ◽  
Seoki Lee
Keyword(s):  
Financial Performance ◽  
Agency Theory ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Content Type ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship ◽  
Moderating Role

Purpose The existing literature has focused heavily on investigating the effect of corporate social performance (CSP) on financial performance (FP) but has not paid sufficient attention to an inverse causation of the relationship. Moreover, while some of the literature argues that FP positively affects CSP, based on the slack resources theory, others have found negative effects of FP on CSP, supporting the managerial opportunism perspective. Thus, this paper aims to address the impact of FP on CSP. Further, this study examines the moderating role of franchising to better understand the relationship. Design/methodology/approach This study uses and expands the models derived from the CSP literature to confirm the effects of FP on CSP with the moderating role of franchising within the restaurant industry. Using two-way fixed effects models, it effectively addresses important problems embedded in the panel data. Findings The findings show a positive effect of FP on CSP, which is inconsistent with Park and Lee’s (2009) findings and supports the slack resources theory. Further, the interesting results show that the impact of FP on CSP diminishes as a firm franchises more, supporting the double-sided moral hazard framework of the agency theory. Originality/value This paper fills the lacuna in both the existing literature on the relationship between CSP and FP and the franchising. This study contributes to enhancing restaurant practitioners’ understanding of the double-sided moral hazard of agency theory unique to franchising context.

Ownership structure and R&D investment: the role of identity and contestability in Spanish listed firms

2020 ◽  
Vol 33 (3/4) ◽  
pp. 405-426
Author(s):  
Laura García-García ◽  
Macarena Gonzalo Alonso-Buenaposada ◽  
M. Elena Romero-Merino ◽  
Marcos Santamaria-Mariscal
Keyword(s):  
Ownership Structure ◽  
Family Firms ◽  
Institutional Investor ◽  
Content Type ◽  
Controlling Shareholders ◽  
Listed Firms ◽  
Low Levels ◽  
The Relationship ◽  
D Investment

PurposeThe purpose of this paper is to analyze the relationship between the ownership structure and the investment in research and development (R&D) for a sample of listed Spanish companies.Design/methodology/approachFollowing the agency theory and the socioemotional wealth (SEW) perspective, the authors propose that R&D investment is affected by ownership structure, specifically by the identity of the controlling owner (family firms and firms with an institutional investor) and the level of contestability by other shareholders. In order to test these hypotheses, the authors build an original database identifying, at a 10% threshold, the ultimate shareholders of a sample of 96 Spanish firms listed during 2008–2018 (1,002 obs).FindingsThe results show that there is no significant relationship between the ownership concentration and the R&D investment. Only when the authors consider the nature of the main shareholder, the authors find that in family firms there is an inverted U relationship between ownership and R&D, so that at low levels of ownership, the R&D increases, while at high levels of ownership (that we compute around 54%) the R&D decreases. Also, when the main shareholder is an institutional investor, the greater its ownership, the higher the R&D investment. Finally, the authors test that, contrary to what mainstream suggests, contestability in family firms is higher when ownership in the hands of other family shareholders increases.Originality/valueThe work uses an original database to test a nonlinear relationship between ownership and R&D investment in family firms. Also, the study addresses a topic hardly ever discussed in the literature about R&D as it is the role of the contestability by other controlling shareholders.

Effects of cloud computing assimilation on supply chain financing risks of SMEs

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Qiang Lu ◽  
Jinliang Chen ◽  
Hua Song ◽  
Xiangyu Zhou
Keyword(s):  
Cloud Computing ◽  
Supply Chain ◽  
Small And Medium Enterprises ◽  
Supply Chain Integration ◽  
Content Type ◽  
Supply Chain Financing ◽  
Medium Enterprises ◽  
The Relationship ◽  
Moderating Role

Purpose The purpose of this study is to examine how cloud computing assimilation reduces supply chain financing (SCF) risks of small and medium enterprises (SMEs). This study also investigated the mediating roles of internal and external supply chain integration between cloud computing assimilation and the SCF risks of SMEs, as well as the moderating role of environmental competitiveness. Design/methodology/approach Data was collected from surveys of SMEs located in China. Multiple regression analysis was used to validate the proposed theoretical model and research hypotheses. Findings The findings show that cloud computing assimilation could reduce the SCF risks of SMEs directly. The results also indicate that both internal and external supply chain integration mediate the relationship between cloud computing assimilation and SCF risks. Furthermore, environmental competitiveness inhibits the effects of cloud computing assimilation on SCF risks. Originality/value To our best knowledge, this is the preliminary study to explore the role of cloud computing assimilation in reducing the SCF risks of SMEs. Also, this study attempted to investigate the process by which cloud computing assimilation affects the SCF risks of SMEs.

The death of distance, revisited: disseminative capacity and knowledge transfer

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chansoo Park
Keyword(s):  
Knowledge Transfer ◽  
Tacit Knowledge ◽  
Explicit Knowledge ◽  
Psychic Distance ◽  
Content Type ◽  
Tacit Knowledge Transfer ◽  
The Relationship ◽  
Moderating Role ◽  
Foreign Parent

Purpose The purpose of this paper is to assess how the transfer of explicit and tacit knowledge is affected by the knowledge disseminative capacity of a foreign parent firm, with an emphasis on the moderating role of psychic distance, by developing and testing a theoretical model of international joint venture (IJV) learning. Design/methodology/approach The author tested the hypotheses with survey data collected from 199 IJVs in South Korea, estimating a structural equation model using AMOS 23.0. Findings The authors found that the capacity of the foreign parent to disseminate knowledge to the IJV has a greater impact on explicit knowledge transfer than tacit knowledge transfer. He also found that the relationship between disseminative capacity and explicit knowledge transfer is significantly moderated by psychic distance, but the relationship between disseminative capacity and tacit knowledge transfer is not. Originality/value The results are critical for IJVs and parent firms seeking to improve knowledge transfer, as they establish the importance of parent firms’ disseminative capacities and the moderating role of psychic distance in the process of both tacit and explicit knowledge transfer. This research addresses the research gap regarding disseminative capacity by providing empirical evidence.

Drivers for voluntary intellectual capital reporting based on agency theory

2019 ◽  
Vol 20 (2) ◽  
pp. 264-281 ◽  
Author(s):  
Viktoria Goebel
Keyword(s):  
Propensity Score ◽  
Agency Theory ◽  
Propensity Score Matching ◽  
Intellectual Capital ◽  
Integrated Reporting ◽  
Content Type ◽  
The Relationship ◽  
Practical Implications ◽  
Management Report

PurposeThe purpose of this paper is to investigate the drivers for voluntary intellectual capital (IC) reporting based on agency theory. This study responds to calls for critical investigations of IC reporting utilising Goebel’s (2015a) IC measuring approach to investigate the role of IC value and mispricing for IC reporting.Design/methodology/approachA mandatory management report offers a unique research setting in Germany. The content analysis results of 428 German management reports are used in a regression analysis with leverage, ownership diffusion, IC value and mispricing. Additionally, a propensity score matching approach examines the relationship between IC reporting and IC value.FindingsThe regression results show that companies use voluntary IC reporting to encounter mispricing. IC reporting is negatively associated with leverage, whereas ownership diffusion and IC value show no significant results. The propensity score matching approach is also not significant.Research limitations/implicationsThis study contributes to strengthening and testing agency theory for IC reporting. As mispricing is identified to play an important role for IC reporting, IC research should account for mispricing.Practical implicationsThe findings suggest to reopen a discussion on the declared aims of the German management report and the international integrated reporting model to provide information on value creation, as IC value shows no link to IC reporting.Originality/valueThis study innovatively links IC reporting to IC value and mispricing to investigate drivers for voluntary IC reporting.

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