A meta-analytic examination of the relationship between family firm generational involvement and performance

2020 ◽  
Vol 43 (8) ◽  
pp. 971-987
Author(s):  
Vasiliki Kosmidou
Keyword(s):  
Firm Performance ◽  
Family Firms ◽  
Meta Analysis ◽  
Negative Relationship ◽  
Family Firm ◽  
Negative Effects ◽  
Content Type ◽  
Universal Family ◽  
And Performance ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between family firm generational involvement and performance. Although researchers have studied this relationship extensively, a complete understanding of its true magnitude and sign is still lacking. Design/methodology/approach This meta-analysis sheds new light on this relationship, integrating the findings of 43 studies with 51 independent samples and 18,802 family firms. Findings The results reveal a small and negative relationship indicating that later-generation family firms perform worse compared to first-generation ones. The authors also show that the relationship is stronger for younger than older and for private than public firms. Finally, the measurements of both variables influence the relationship yielding critical research implications. Research limitations/implications This study suggests that future researchers examining the effects of generational involvement on family firm performance should conduct their analysis using multiple measures of both variables to ensure the accuracy of their results. It also highlights the need of family business scholars to converge to the use of a universal family firm definition, as findings differ significantly in strength and direction depending on which definition is used. Practical implications From a practitioners’ perspective, the findings imply that owners of young and private family firms should consider professionalizing and adopting a balanced top management team composition consisting of both family and non-family members as a way to mitigate the negative effects of “familiness” on performance. Originality/value This study empirically demonstrates the importance of adopting a generational perspective when examining differences in family firm performance.

scholarly journals Entrepreneurial orientation, competitive advantage and strategic knowledge management capability in Malaysian family firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Md Imtiaz Mostafiz ◽  
Mathew Hughes ◽  
Murali Sambasivan
Keyword(s):  
Knowledge Management ◽  
Firm Performance ◽  
Risk Taking ◽  
Family Firms ◽  
Family Firm ◽  
Content Type ◽  
The Family ◽  
And Performance ◽  
The Relationship ◽  
Strategic Knowledge Management

Purpose The purpose of this study is to test the thesis that the family firm’s success hinges on effective strategic knowledge management (SKM) capability coupled with an entrepreneurial orientation (EO). Contingency theory holds that entrepreneurial success is contingent on strategic capabilities and resource orchestration theory explains how well family firms nurture capabilities to structure, bundle and leverage resources that define competitive advantage (CA). This study combines these two theoretical viewpoints to propose the effects of EO and SKM capability on CA to achieve successful performance in family firms. Design/methodology/approach This study uses a hybrid approach applying structural equation modelling (SEM) and deep-learning artificial intelligence (DL-AI) analysis to survey data on 268 Malaysian family firms. Findings SEM results confirm that CA mediates the relationship between innovativeness, proactiveness and risk-taking dimensions of EO and firm performance. Autonomy and competitive aggressiveness have no bearing, however. The relationships among innovativeness, proactiveness and risk-taking with CA and performance are positively moderated by SKM capability, becoming more potent at higher levels. Moreover, four additional DL-AI models reveal the necessity of specific EO dimensions and the interacting effects of EO–SKM capability to influence CA and to attain performance success subsequently. Originality/value This study theorizes and presents two new boundary conditions to a knowledge-based theory of the family firm and its firm performance. First, CA mediates the relationship between EO and performance; and second, SKM capability moderates the relationships between EO and CA and between EO and family firm performance. Methodologically, this study uses DL-AI to embrace non-linearity and prioritize predictor variables based on normalized importance to produce greater accuracy over regression analysis. Hence, DL-AI adds methodological novelty to the knowledge management and family firm literature.

Absorptive capacity and small family firm performance: exploring the mediation processes

2018 ◽  
Vol 22 (6) ◽  
pp. 1201-1216 ◽  
Author(s):  
Sanjay Chaudhary ◽  
Safal Batra
Keyword(s):  
Knowledge Management ◽  
Firm Performance ◽  
Absorptive Capacity ◽  
Family Firms ◽  
Family Firm ◽  
Content Type ◽  
Small Family ◽  
Strategic Orientations ◽  
And Performance ◽  
The Relationship

Purpose Despite the recognized importance of knowledge management for small family firms, relatively little empirical research has been done so far to understand the mechanisms through which absorptive capacity (AC) assists their performance. The purpose of this study is to understand the relationship between absorptive capacity and performance in small family firms. Design/methodology/approach In this study, the authors theoretically argue and empirically validate that AC enables the creation of entrepreneurial, market and technology orientations in small family firms, which, in turn, lead to superior firm performance. They also tested the study’s hypotheses using mediation and multiple linear regression analyses on data collected from 272 small Indian family firms. Findings The study’s findings suggest indirect relationship between AC and performance. The strategic orientations provide a mechanism through which investments in small family firms’ AC results in firm performance. Practical implications This study offers crucial insights to practitioners and small firm managers regarding the use of knowledge-based capabilities in creating appropriate strategic postures, which, in turn, assist firm performance. Originality/value This study is among few research attempts in understanding the knowledge aspects of small family firms. The present research contributes to the existing literature by unravelling the relationship between knowledge management and small family firm performance. Also, by bringing in data from an under-studied context of an emerging economy, this study strengthens the theoretical applicability of knowledge management in different contexts.

Debt policy and firm performance of family firms: the impact of economic adversity

2017 ◽  
Vol 13 (3) ◽  
pp. 267-286 ◽  
Author(s):  
Elisabete Simões Vieira
Keyword(s):  
Firm Performance ◽  
Family Firms ◽  
Negative Relationship ◽  
Small Sample ◽  
Minority Shareholders ◽  
Content Type ◽  
And Performance ◽  
The Impact ◽  
The Relationship ◽  
Debt Policy

Purpose The purpose of this paper is to analyse the relationship between debt policy and performance among family firms (FF), providing evidence on whether FF differ from non-family firms (NFF). It also focusses on the possibility of asymmetrical debt policy impact on performance between periods of stability and economic adversity. Design/methodology/approach The paper employs panel data regression, considering a sample of Portuguese listed firms for the period between 1999 and 2014. Findings Overall, the author find evidence that debt contributes negatively to firms’ performance, which is consistent with the pecking order prediction, and that the relationship between debt and performance do not differ significantly between FF and NFF. After addressing the endogeneity issue, the author conclude that firms’ performance is negatively influenced by both short- and long-term debt. Considering the total debt, the negative relationship between the two variables differs from family and non-family companies. The results show that age and size influences positively, and the independence of the board directors influences negatively the firms’ performance. The empirical findings suggest that under economic adversity, the firms’ performance is negatively affected. Finally, the author conclude that return on assets appear to fit better than return on equity or MB when you want to relate debt and firm performance. Research limitations/implications A limitation of this study is the small size of the Euronext Lisbon that results in a small sample. Originality/value This paper offers some insights on the relationship between debt policy and firm performance from a country with weak protection of minority shareholders, concentrated ownership and a significant family control. It also gives the opportunity to analyse whether firm performance differs according to market conditions.

The impact of service innovation on firm performance: a meta-analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Changli Feng ◽  
Ruize Ma ◽  
Lin Jiang
Keyword(s):  
Firm Performance ◽  
Positive Impact ◽  
Meta Analysis ◽  
Service Innovation ◽  
Future Research ◽  
Quantitative Review ◽  
Content Type ◽  
And Performance ◽  
The Impact ◽  
The Relationship

PurposeWith the rise of service economy, many companies are attempting to gain a competitive advantage through service innovation. However, the existing research has not drawn consistent conclusions about the relationship between service innovation and firm performance. Hence, the purpose of this paper is to provide a quantitative review on the service innovation-performance relationship based on research findings reported in the extant literature.Design/methodology/approachStudies from 46 peer-reviewed articles were sampled and analyzed. A meta-analytic approach was adopted to conduct a quantitative review on the relationship between service innovation and firm performance, and the effects of any potential moderators were further explored.FindingsThe results found that service innovation has a significant positive impact on firm performance. Additionally, the relationship between service innovation and firm performance is influenced by measurement moderators (economic region and performance measurement), and contextual moderators (firm type, innovation type, customer factors and attitudes toward risk).Originality/valueThe meta-analysis has been used to explore the relationship between service innovation and firm performance, and the findings have contributed to the literature on service innovation, as well as providing future research directions.

Audit committee effectiveness and family firms: impact on performance

2019 ◽  
Vol 58 (6) ◽  
pp. 1021-1034
Author(s):  
Jihad Al-Okaily ◽  
Salma Naueihed
Keyword(s):  
Firm Performance ◽  
Fixed Effects ◽  
Audit Committee ◽  
Family Firms ◽  
Family Firm ◽  
Fixed Effects Model ◽  
Minority Shareholders ◽  
Content Type ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to empirically examine the relationship between audit committee characteristics and firm performance, and whether family ownership and involvement moderate the latter relationship. Design/methodology/approach Following Anderson and Reeb (2003), this paper estimates a two-way fixed effects model. A sub-sample analysis is used by first examining the impact of audit committee effectiveness on firm performance only in non-family firms and then only in family firms. A fully interacted model was also analyzed in the robustness tests. Findings This paper finds that the audit committee characteristics of size, expertise and meeting frequency are positively and significantly related to non-family firm performance, while insignificantly related to family firm performance. Research limitations/implications The evidence reported in this paper may be of use for regulators and policy makers pondering corporate governance reforms, as well as for investors, managers and minority shareholders concerned with firm performance and valuation. Originality/value To the best of the authors’ knowledge, this is the first study of its kind to examine the moderating effect of family control and involvement on the relationship between firm performance and audit committee effectiveness in terms of size, expertise and meeting frequency.

Family firms’ innovation drivers and performance: a dynamic capabilities approach

2019 ◽  
Vol 9 (1) ◽  
pp. 4-23 ◽  
Author(s):  
Hong Y. Park ◽  
Kaustav Misra ◽  
Surender Reddy ◽  
Kylie Jaber
Keyword(s):  
Firm Performance ◽  
High Velocity ◽  
Family Firms ◽  
Firm Strategy ◽  
Family Firm ◽  
Economic Environment ◽  
Significant Variable ◽  
Content Type ◽  
Positive Effects ◽  
And Performance

PurposeEntrepreneurial innovation has been the most important source for improvement in firm performance. Innovation in family firms has become the focal issue in firm strategy. In today’s high-velocity environment, the dynamic organizational adaptation is essential for sustainable competitive advantage. The purpose of this paper is to investigate the nature of changes in external environment and the relationship between changes in the economic environment and family firms’ innovation in response to the environmental shift.Design/methodology/approachThe authors designed a survey questionnaire to obtain primary data for the study. The survey consists of family firm structure, innovation drivers, governance, core competence and performance. Authors applied a random stratified sample method in selecting samples to reflect the population in family firms.FindingsThe study identified market conditions, technology and regulation as innovation drivers. The authors found that these innovation drivers have positive effects on family firm performance, although the technology variable is the only statistically significant variable at the conventional statistical significance level.Research limitations/implicationsThe authors expected to have better response rate, and wish to have more observations. The authors would have stronger results if you could get more data.Practical implicationsFamily firms need to respond to the high velocity of environment and to develop capabilities that understand the nature of changes in economic environment and take effective steps. The study findings offer guidelines for the managers of how to manage the firms in the dynamic environment.Social implicationsFamily firms should use this results to develop strategies to deal with various economics situations.Originality/valueThe study identifies innovation drivers in family firms. The study contributes to finding and empirical testing of family firm innovation drivers. Findings of the study are valuable for managing the high velocity of today’s economic environment: changes in markets, technologies and regulations.

The Moderating Effect of Family Firm Status on the Entrepreneurial Orientation-Performance Relationship

2019 ◽  
pp. 102-132
Author(s):  
Remedios Hernández-Linares ◽  
María Concepción López-Fernández ◽  
Laura Victoria Fielden Burns
Keyword(s):  
Firm Performance ◽  
Entrepreneurial Orientation ◽  
Family Firms ◽  
Small And Medium Enterprises ◽  
Positive Association ◽  
Chief Executive ◽  
Family Firm ◽  
Moderating Effect ◽  
And Performance ◽  
The Relationship

Although management literature mostly reports a positive association between entrepreneurial orientation and firm performance, it also recognizes that different business contexts may prompt different manifestations of entrepreneurial orientation. Considering that family firms constitute the backbone of most economies across the globe, and based on arguments from socioemotional wealth perspective, this research aims to examine the moderating effect of being a family firm on the relationship between entrepreneurial orientation and firm performance. The empirical study is based on primary information obtained from the chief-executive-offices of 402 small and medium-enterprises (SMEs) from Portugal, a country located in southwestern Europe, and one that has been scantly investigated by the literature in the confluence between entrepreneurial orientation and family firms. Results show that the family firm status weakens the relationship between entrepreneurial orientation and performance in the Portuguese SMEs.

Internationalization and family firm performance

2020 ◽  
Vol 27 (1) ◽  
pp. 1-25
Author(s):  
Bart J. Debicki ◽  
Chao Miao ◽  
Shanshan Qian
Keyword(s):  
Firm Performance ◽  
Family Firms ◽  
Meta Analysis ◽  
Family Firm ◽  
Future Research ◽  
Content Type ◽  
Potential Impact ◽  
The Impact ◽  
Positive Effect

Purpose The purpose of this paper is to evaluate the effect of internationalization on performance in family firms, as well as the potential impact of moderators on this relationship. Design/methodology/approach This paper is a meta-analysis of the impact of internationalization on performance in family firms, as well as the role of several moderators shaping this relationship, based on 29 studies. Findings The findings indicate a significant positive effect of internationalization on family firm performance. This relationship was stronger in family firms with lower family ownership. Several methodological moderators were significant, such as the means of measuring performance and internationalization. The results also point to several cultural moderators, such as individualism, masculinity, low uncertainty avoidance and short-term orientation, which positively influence the main effect. Originality/value The authors provide discussions of the results, their practical and theoretical implications, as well as avenues for future research.

A meta-analysis: capital structure and firm performance

2020 ◽  
Vol 22 (1) ◽  
pp. 111-129
Author(s):  
Binh Thi Thanh Dao ◽  
Tram Dieu Ngoc Ta
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Effect Size ◽  
Meta Analysis ◽  
Secondary Data ◽  
Large Sample Size ◽  
Content Type ◽  
Small Effect Size ◽  
And Performance ◽  
The Relationship

PurposeThe paper aims at providing insights on the relationship between capital structure and performance of the firm by employing meta-analytical approach to obtain a synthesized result out of controversial studies as well as the sources for such inconsistency.Design/methodology/approachUsing secondary data, the analysis is divided into two main parts with concerns to the overall strength of the relationship, the effect size and the potential paper-specific characteristics influencing the magnitude of impacts between leverage and firm performance (moderators of the relationship). Overall, a total number of 32 journals, reviews and school presses were selected besides online libraries and publishing platforms. There were 50 papers with 340 studies chosen from 2004 to 2019, of which data range from 1998 to 2017.FindingsUsing Hedges et al. (1985,1988), descriptive and quantitative analysis have been conducted to confirm that corporate performance is negatively related to capital decisions, which inclines toward trade-off model with agency costs and pecking order theory. The estimation induces rather small effect size that implies sufficiently large sample size to be effectively investigated. In terms of moderator analysis, random-effects meta-regression models of three different techniques are used to increase the robustness in research findings, showing statistically significant elements as publication status, factor of industry and proxy of firm performance.Originality/valueThis paper is one of the first papers presenting meta-analysis in capital structure and performance for two languages, Vietnamese and English, providing a consistent result with previous worldwide papers.

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.

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