Impact of Internationalization on Financial Performance: A Study of Family and Non-Family Firms

Purpose This paper aims to investigate the financial performance of listed firms on the Australian Securities Exchange (ASX) over two sample periods (1998-2007 and 2008-2010) before and during the global financial crisis periods. Design/methodology/approach The generalized method of moments (GMM) has been used to examine the relationship between family ownership and a firm’s performance during the financial crisis period, reflecting on the higher risk exposure associated with capital markets. Findings Applying firm-based measures of financial performance (ROA and ROE), the empirical results show that family firms with ownership concentration performed better than nonfamily firms with dispersed ownership structures. The results also show that ownership concentration has a positive and significant impact on family- and nonfamily-owned firms during the crisis period. In addition, financial leverage had a positive and significant effect on the performance of Australian family-owned firms during both periods. However, if the impact of the crisis by sector is taking into account, the financial leverage only becomes significant for the nonmining family firms during the pre-crisis period. The results also reveal that family businesses are risk-averse business organizations. These findings are consistent with the underlying economic theories. Originality/value This paper contributes to the debate whether the ownership structure affects firms’ financial performance such as ROE and ROA during the global financial crisis by investigating family and nonfamily firms listed on the Australian capital market. It also identifies several influential drivers of financial performance in both normal and crisis periods. Given the paucity of studies in the area of family business, the empirical results of this research provide useful information for researchers, practitioners and investors, who are operating in capital markets for family and nonfamily businesses.

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A Meta-Analysis About the Financial Performance of Family Firms: Another Try

SSRN Electronic Journal ◽

10.2139/ssrn.2540065 ◽

2014 ◽

Author(s):

Dominik Wagner ◽

Jorn H. Block ◽

Danny Miller ◽

Christian Schwens ◽

Guoqian Xi

Keyword(s):

Financial Performance ◽

Family Firms ◽

Meta Analysis

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President interlocking, family firms and performance during turbulent times: Evidence from Latin America

European Journal of Family Business ◽

10.24310/ejfbejfb.v6i2.5019 ◽

2016 ◽

Vol 6 (2) ◽

Author(s):

Karen Watkins-Fassler ◽

Virginia Fernández-Pérez ◽

Lázaro Rodríguez-Ariza

Keyword(s):

Latin America ◽

Financial Performance ◽

Latin American ◽

Family Firms ◽

Annual Data ◽

Minority Shareholders ◽

Return On Assets ◽

Publicly Traded Companies ◽

Turbulent Times ◽

And Performance

n Latin America, company ownership is typically concentrated in the hands of controlling families, who build powerful business groups which facilitate interlocking practices. The purpose of this study is to examine how President interlocking relates with financial performance in Latin American firms, under uncertainty circumstances. Using regression analysis (panel least squares), the association between return on assets and President interlocking during turbulent times is analyzed. For the latter, annual data (2009–2010) from non-financial publicly traded companies in Chile (243 firms) and Mexico (89 firms) is employed. It is documented that President interlocking in Latin American firms is positively associated with financial performance. However, this effect is higher in Chile than in Mexico, where minority shareholders and other stakeholders are better protected against expropriation. This study increases the understanding of the strengths of President interlocks in stormy times, by introducing the Latin American context.

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Socioemotional wealth and human resource policies: effects on family firm performance

International Journal of Entrepreneurial Behaviour & Research ◽

10.1108/ijebr-05-2021-0404 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Juan David Peláez-León ◽

Gregorio Sánchez-Marín

Keyword(s):

High Risk ◽

Financial Performance ◽

Human Resource ◽

Family Firms ◽

Equation Modeling ◽

Positive Contribution ◽

Socioemotional Wealth ◽

Content Type ◽

Firm Financial Performance ◽

The Relationship

PurposeThis study analyses whether human resource management (HRM), through the use of four sets of high-performance work policies (HPWPs) (i.e. selection, training, motivation and opportunity policies), mediates the relationship between socioemotional wealth (SEW)—defined as a unique set of nonfinancial family goals—and firm financial performance when family firms face a high-risk context.Design/methodology/approachHypotheses were statistically tested using a structural equation modeling (SEM) methodology with a cross-sectional sample of 196 medium-sized and private family firms in a high-risk context in Spain.FindingsThe results indicate that the relationship between SEW and financial performance in family firms is fully mediated by the use of HPWPs, especially by training and motivation HR policies. The importance given to preserving SEW influences the use of four sets of HPWPs when family firms show clear evidence of being confronted by a financial decline (i.e. a high-risk context). However, to improve their financial results to avoid the firm's failure and thus the loss of their SEW, only those HR policies that focus on training and motivation made a significant and positive contribution to the firm financial performance.Originality/valueThis study contributes to the literature on family firms and HRM by adopting an alternative theoretical framework to understand how the importance of nonfinancial family goals may affect employee structures and management policies, thereby improving financial performance in family firms.

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The role of non-economic goals in facilitating financial performance in family and non-family firms: a moderated mediation model

International Journal of Management and Enterprise Development ◽

10.1504/ijmed.2016.10000578 ◽

2016 ◽

Vol 15 (4) ◽

pp. 308

Author(s):

Bart J. Debicki ◽

Robert Van De Graaff Randolph ◽

Robert Zajkowski

Keyword(s):

Financial Performance ◽

Family Firms ◽

Moderated Mediation ◽

Mediation Model ◽

Moderated Mediation Model

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Family presence and financial performance in large listed companies in India

Corporate Board role duties and composition ◽

10.22495/cbv7i2c1art4 ◽

2011 ◽

Vol 7 (2) ◽

pp. 40-53 ◽

Cited By ~ 1

Author(s):

Rakesh Pandey ◽

Dennis Taylor ◽

Mahesh Joshi

Keyword(s):

Financial Performance ◽

Family Firms ◽

Negative Relationship ◽

Multiple Linear Regression Model ◽

Family Ownership ◽

Business Practices ◽

Family Presence ◽

Listed Firms ◽

Concentrated Ownership ◽

Better Than

This study investigates the impacts of family presence and board independence on corporate financial performance in 131 large listed firms from India, an emerging economy dominated by the presence of large business groups having concentrated ownership. Family presence includes the extent of family ownership and appointment of family CEO and family chairperson. Employing a multiple linear regression model, this study first detects a positive relationship between family ownership and financial performance. Second, a negative relationship is found between family CEO and firm performance, indicating that family firms with non-family CEOs perform better than firms having family CEOs. Third, the proportion of Board outsiders ‟ (i.e. independent non-family directors) is found to have no significant relation to financial performance, thus challenging agency theory‟s need for independent monitoring in family firms to enhance performance. These results are interpreted in the context of historical Indian family business practices and modern changes.

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Family Businesses And Corporate Social Responsibility (CSR) Orientation: A Study Of Moroccan Family Firms

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v30i3.8552 ◽

2014 ◽

Vol 30 (3) ◽

pp. 671 ◽

Cited By ~ 5

Author(s):

Jamal Elbaz ◽

Issam Laguir

Keyword(s):

Family Structure ◽

Financial Performance ◽

Family Firms ◽

Exploratory Research ◽

Legitimacy Theory ◽

The Family ◽

Moroccan Family ◽

Corporate Social ◽

The Impact ◽

Csr Orientation

<p>Several researchers have reported that family firms tend to show a CSR orientation in their activities which might increase their performance (Chrisman et al., 2005; O'Boyle et al., 2010).</p> <p>In Morocco, many studies have focused on the integration of CSR principles into businesses without highlighting the impact of family structure on the adoption of CSR. Therefore, the objective of this study was to determine whether the family structure of Moroccan companies influences CSR adoption and how it affects financial performance. We used a framework combining stakeholder theory, legitimacy theory and stewardship theory and investigated the linkage between family structure, CSR orientation and financial performance. Our results show that family structure positively influences the CSR orientation of Moroccan family firms and thus enhances their financial performance. Although this trend is recent in Morocco, our exploratory research on CSR in Moroccan family firms is a first step toward establishing a model to explain this phenomenon in developing countries.</p>

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