Do Family Firms Have Higher or Lower Deal Valuations? A Contextual Analysis

2020 ◽  
pp. 104225872091095
Author(s):  
Zulfiquer Ali Haider ◽  
Jialong Li ◽  
Yefeng Wang ◽  
Zhenyu Wu
Keyword(s):  
Family Firms ◽  
Family Firm ◽  
Contextual Analysis ◽  
Socioemotional Wealth ◽  
Loosely Coupled ◽  
Foreign Acquisitions ◽  
Family Governance ◽  
The Core ◽  
Post Hoc

How does the socioemotional wealth (SEW) of a family firm affect its deal valuation in acquisition? Using a sample of 515 completed transactions of S&P 500 firms over the period 2003–2016, we examine a number of contexts and find that SEW creates differential valuations of targets by family firms vis-à-vis non-family firms. Particularly from an internationalization perspective, acquisitions may be an ideal option for family firms because foreign acquisitions may be loosely coupled from the core firm. Post-hoc analyses on the heterogeneity in family governance reveal that founder and descendant board chairs may have different perceptions of SEW.

scholarly journals Investors’ Reactions to CSR News in Family Versus Nonfamily Firms: A Study on Signal (In)credibility

2021 ◽  
pp. 104225872110104
Author(s):  
Naciye Sekerci ◽  
Jamil Jaballah ◽  
Marc van Essen ◽  
Nadine Kammerlander
Keyword(s):  
Stock Market ◽  
Event Study ◽  
Family Firms ◽  
Signaling Theory ◽  
Family Firm ◽  
Stock Market Index ◽  
Important Condition ◽  
Post Hoc Analysis ◽  
Market Index ◽  
Post Hoc

We study family firm status as an important condition in signaling theory; specifically, we propose that the market reacts more positively to positive, and more negatively to negative, CSR news (i.e., signals) from family firms than to similar news from nonfamily firms. Moreover, we propose that during recessions, the direction of these relationships reverses. Based on an event study of 1247 positive and negative changes in the CSR ratings for all firms listed on the French SFB120 stock market index (2003-2013), we find support for our hypotheses. Moreover, a post hoc analysis reveals that the relationships are contingent on whether a family CEO leads the firm.

The Effect of Transgenerational Control Intention on Family-Firm Performance: It Depends Who Pursues It

2017 ◽  
Vol 43 (3) ◽  
pp. 629-646 ◽  
Author(s):  
Christian Hoffmann ◽  
Peter Jaskiewicz ◽  
Torsten Wulf ◽  
James G. Combs
Keyword(s):  
Firm Performance ◽  
Family Firms ◽  
Empirical Investigation ◽  
Cognitive Biases ◽  
Family Firm ◽  
Socioemotional Wealth ◽  
German Family

Transgenerational control intention (TCI) is a pivotal characteristic of many family firms. Yet, it remains unclear whether TCI benefits family-firm performance by instilling a long-term view, or hurts performance by fueling harmful socioemotional wealth (SEW) goals. We posit that it depends who pursues it. When faced with TCI, family managers are known to suffer from cognitive biases that, we submit, do not similarly apply to nonfamily managers. Thus, only family managers harm performance when pursuing TCI. An empirical investigation of 107 private German family firms supports our theory; the effect of TCI on firm performance depends on who pursues it.

Socioemotional Wealth in Family Firms

2012 ◽  
Vol 25 (3) ◽  
pp. 258-279 ◽  
Author(s):  
Pascual Berrone ◽  
Cristina Cruz ◽  
Luis R. Gomez-Mejia
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family Firm ◽  
Socioemotional Wealth ◽  
Future Studies ◽  
Theoretical Approaches ◽  
The Family ◽  
Different Dimensions ◽  
Dominant Paradigm

This article makes the case for the socioemotional wealth (SEW) approach as the potential dominant paradigm in the family business field. The authors argue that SEW is the most important differentiator of the family firm as a unique entity and, as such, helps explain why family firms behave distinctively. In doing so, the authors review the concept of SEW, its different dimensions, and its links with other theoretical approaches. The authors also address the issue of how to measure this construct and offer various alternatives for operationalizing it. Finally, they offer a set of topics that can be pursued in future studies using the SEW approach.

scholarly journals High-performance work practices, socioemotional wealth preservation, and family firm labor productivity*

2021 ◽  
pp. 234094442110025
Author(s):  
Remedios Hernández-Linares ◽  
María Concepción López-Fernández ◽  
Esra Memili ◽  
Frank Mullins ◽  
Pankaj C Patel
Keyword(s):  
Labor Productivity ◽  
High Performance ◽  
Family Firms ◽  
Empirical Studies ◽  
Family Firm ◽  
Jel Classification ◽  
Work Practices ◽  
Socioemotional Wealth ◽  
High Performance Work Practices ◽  
Research Gap

Despite growing research on the effect of high-performance work practices (HPWPs) on family firm performance, the implications of socioemotional wealth (SEW) preservation remain ambiguous. This stems from SEW preservation being used primarily as an explanatory construct and assessed indirectly rather than directly in empirical studies. To address this research gap, we draw upon organizational control and signaling theories to determine the “true” interaction between HPWPs and SEW preservation for labor productivity. Specifically, competing hypotheses are presented to determine if this interaction supports complementarity or substitutability. Using a sample of 124 Spanish family firms and a direct measurement of SEW preservation, our results provide support for substitutability, suggesting that family firms can realize higher labor productivity when HPWPs are fully implemented and commitment to SEW preservation is low, and vice versa. These findings have important implications for family firms, given HPWPs’ inverse relationship with SEW preservation regarding labor productivity. JEL CLASSIFICATION J24, L20, L21, L26, M12_M12, M54_M54, O15

scholarly journals Concept of Family Governance

2018 ◽  
Vol 48 (3) ◽  
pp. 61-68
Author(s):  
Jacek Lipiec
Keyword(s):  
Corporate Governance ◽  
Family Firms ◽  
Specific Interaction ◽  
Family Values ◽  
Family Firm ◽  
Family Governance ◽  
The Family ◽  
Similar Solutions

This article presents the concept of family governance based on the experience gained in the Roleski firm (the Constitution of Roleski family firm established in 2010) and the Łapaj firm (the Inheritance Statute of the Łapaj Group, 2011). The family governance has evolved from the corporate governance by taking into account the specific interaction of a family with a firm which manifests itself mainly in respecting family values. Based on experiences gained in both firms the process of building family governance was presented. It may be used by other family firms in implementing similar solutions that may help them to maintain the long-lasting development.

An Institution-Based View of Large Family Firms: A Recap and Overview

2018 ◽  
Vol 42 (2) ◽  
pp. 187-205 ◽  
Author(s):  
Mike W. Peng ◽  
Wei Sun ◽  
Cristina Vlas ◽  
Alessandro Minichilli ◽  
Guido Corbetta
Keyword(s):  
Family Firms ◽  
Large Family ◽  
Family Firm ◽  
Family Ownership ◽  
Socioemotional Wealth ◽  
Broad Scope ◽  
The World ◽  
Institutional Transitions ◽  
Recent Debate ◽  
And Control

This article sketches the contours of an institution-based view of family ownership and control in large firms, with a focus on institutional roots, institutional relatedness, and institutional transitions. The institution-based view brings considerable continuity to family-firm research. It also offers significant novelty in helping resolve some puzzles. Specifically, it answers why the Berle and Means hypothesis on the “inevitability” of separation of ownership and control has not received support in many parts of the world. Finally, its broad scope enables us to integrate institution-based arguments with an important recent debate on the socioemotional wealth (SEW) priorities of family firms.

Congruence in Exchange: The Influence of Supervisors on Employee Performance in Family Firms

2018 ◽  
Vol 43 (2) ◽  
pp. 302-321 ◽  
Author(s):  
Benjamin D. McLarty ◽  
James M. Vardaman ◽  
Tim Barnett
Keyword(s):  
Goal Orientation ◽  
Social Exchange ◽  
Social Exchange Theory ◽  
Opposite Effect ◽  
Family Firms ◽  
Employee Performance ◽  
Family Firm ◽  
Exchange Theory ◽  
Socioemotional Wealth ◽  
Citizenship Performance

A pluralistic focus on economic and noneconomic goals creates dissonance for family firm employees. Drawing on social exchange theory, this study explores the idea that congruence between supervisor familial status and importance placed on socioemotional wealth aids in resolving this dissonance and allows committed employees to translate their efforts into better performance. The three-way interaction results show that committed employees working for congruent supervisors experienced higher task and citizenship performance. Supervisor incongruence resulted in the opposite effect. These findings suggest supervisor genuineness is vital to employee performance because of the dissonance associated with the pluralistic goal orientation in family firms.

scholarly journals Back to the Roots: Applying the Concept of Individual Human Values to Understand Family Firm Behavior

2020 ◽  
pp. 089448652094428
Author(s):  
Philipp Julian Ruf ◽  
Michael Graffius ◽  
Sven Wolff ◽  
Petra Moog ◽  
Birgit Felden
Keyword(s):  
Structural Equation ◽  
Family Firms ◽  
Firm Behavior ◽  
Family Firm ◽  
Equation Modeling ◽  
Socioemotional Wealth ◽  
Individual Values ◽  
Data Set ◽  
Different Dimensions ◽  
Individual Human

This study examines the influence of individual owner-manager values on the different dimensions of socioemotional wealth in family firms. We argue that values of owner-managers in family firms are one of the underlying motivators for socioemotional wealth behavior and used structural equation modeling to test the assumed connection. The results of our data set with 1,003 cases show, in accordance with Schwartz’s value dimensions, that social- and person-oriented values influence different dimensions of the FIBER scale. Our findings help understand the importance of individual values, advance socioemotional wealth research, and contribute to the understanding of family firm behavior.

scholarly journals Scientometric Analysis of Research on Socioemotional Wealth

2021 ◽  
Vol 13 (7) ◽  
pp. 3742
Author(s):  
Luis Araya-Castillo ◽  
Felipe Hernández-Perlines ◽  
Hugo Moraga ◽  
Antonio Ariza-Montes
Keyword(s):  
Family Firms ◽  
Family Firm ◽  
Scientometric Analysis ◽  
Mississippi State University ◽  
State University ◽  
Socioemotional Wealth ◽  
Number Of Publications ◽  
The Many ◽  
The One ◽  
The University

Scientometric studies have become very important within the scientific environment in general, and in the family firm area in particular. This study aims at conducting a bibliometric analysis of socioemotional wealth within family firms. To this end, a background search of the terms family firm and socioemotional wealth has been carried out in the Web of Science, specifically in specialized journals published between 1975 and 2019 in the Science Citation Index. The resulting scientometric analyses are of the number of papers and citations, the main authors and journals, the WoS categories, the institutions, the countries and the word co-occurrence. One of the main conclusions of this paper is the abundance of studies that have been conducted on socioemotional wealth in family firms, which is reflected in the number of publications (501) and of citations of these studies (12,090). Another significant revelation is the copious number of authors, with Gómez-Mejía being the most relevant one and De Massis the one with the highest number of publications. Also noteworthy are the many USA-based institutions, with the Mississippi State University and the University of North Carolina being the two most prominent. In addition, studies have been carried out about family firms’ focus, mainly, on performance and ownership.

Payout differences between family and nonfamily listed firms: a socioemotional wealth perspective

2016 ◽  
Vol 6 (1) ◽  
Author(s):  
Manon Deslandes ◽  
Anne Fortin ◽  
Suzanne Landry
Keyword(s):  
Design Methodology ◽  
Family Firms ◽  
Family Firm ◽  
Future Research ◽  
Share Repurchases ◽  
Probit Regression ◽  
Socioemotional Wealth ◽  
Listed Firms ◽  
Definition Of ◽  
The Relationship

Purpose The objective of this study is to explain family firm payout decisions based on socioemotional wealth (SEW) considerations. Design/methodology/approach A sample of publicly listed Canadian companies is examined for the period from 2003 to 2008. Distinguishing family firms from nonfamily firms, a Probit regression is used to analyze the likelihood of making a payout. For payout firms, regressions are used to analyze the relationship between payout level (dividends and share repurchases) and payout mix and family firms. Findings Results indicate that family firms are more likely to make a payout than nonfamily firms. Among payout firms, the level of payout among payout firms is lower for family firms than for nonfamily firms and their portion of payout in the form of dividends is higher. Lone founder family firms have a lower likelihood of making payouts than other family firms. However, among payout firms, they pay out more than other family firms and have a smaller percentage of their total payout in dividends than other family firms. Research limitations/implications Results are impacted by the definition of what constitutes a family firm. Family ownership was used as a proxy for the underlying SEW considerations. Future research could involve interviews with family firm representatives to investigate the relative importance of SEW considerations in their payout decisions. Originality/value In providing an alternative theoretical framing of family firms’ payout policies, the study suggests that payout differences between family and nonfamily firms may be driven in part by SEW considerations.

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