scholarly journals Why do family firms congregate in certain industries?

2010 ◽  
Vol 8 (1) ◽  
pp. 346-359
Author(s):  
En-Te Chen ◽  
John Nowland
Keyword(s):  
Firm Performance ◽  
Positive Relationship ◽  
Family Firms ◽  
Stock Exchange ◽  
Family Firm ◽  
Board Independence ◽  
Taiwan Stock Exchange ◽  
Fixed Assets ◽  
And Performance ◽  
Industry Conditions

We propose that family firm involvement and performance across industries is not random and is related to specific industry conditions. Using the population of listed companies on the Taiwan Stock Exchange over the period 1997-2007 we find that family firms are more involved in industries with greater fixed assets and lower board independence. We document a positive relationship between family firm involvement and performance, which indicates a net advantage for family firm shareholders in industries where family firms congregate. However, we also find that family firm performance is negatively affected when family firms use more debt and maintain a higher control wedge than their industry counterparts.

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.

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.

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.

Board of directors characteristics and performance in family firms and under the crisis

2018 ◽  
Vol 18 (1) ◽  
pp. 119-142 ◽  
Author(s):  
Elisabete Simões Vieira
Keyword(s):  
Board Of Directors ◽  
Family Firms ◽  
Stock Exchange ◽  
Gender Diversity ◽  
Family Firm ◽  
Family Businesses ◽  
Content Type ◽  
The Board Of Directors ◽  
And Performance ◽  
And Gender

Purpose This paper aims to examine the relationship between board of directors’ characteristics and performance in family businesses. It offers evidence to the question of whether a family firm (FF) differs from a non-family firm and looks at the possibility of asymmetrical effects between periods of stability and economic adversity. Design/methodology/approach A panel data approach was applied to a sample of Portuguese firms listed the on Euronext Lisbon exchange between 2002 and 2013. Findings The results show that FFs are likely to have a lower proportion of independent members and higher gender diversity on their boards than non-family firms. FF performance is positively related to ownership concentration and gender diversity. There are performance premiums for family businesses, which have more gender diversity than their counterparts. These effects also depend on whether the economy is in recession. The evidence suggests that the presence of women on the board and the leverage and size of the FFs have a more significant impact on the performance in periods of economic adversity. Research limitations/implications One limitation of this study is the small size of the sample as it was drawn from the Euronext Lisbon exchange, a small stock exchange market. Originality/value This study provides input into the academic discussion on corporate governance and FF, an area which is in need of research. In addition, the authors examine this issue in conjunction with generalised economic adversity, focusing on the possible asymmetrical effects that the nature of the board of directors may have on performance in periods of stability and those of economic adversity. The role of board of directors is crucial to the understanding of corporate behaviour and the setting of the policy that regulates corporate activities.

scholarly journals Managerial ownership, capital expenditures, and firm performance: evidence from the Taiwan stock exchange

2008 ◽  
Vol 5 (4) ◽  
pp. 418-426
Author(s):  
Ching-Hai Jiang ◽  
Kuei-yuan Wang ◽  
Yen-Sheng Huang
Keyword(s):  
Firm Performance ◽  
Positive Relationship ◽  
Stock Exchange ◽  
Interactive Effect ◽  
Capital Expenditures ◽  
Managerial Ownership ◽  
Empirical Results ◽  
Taiwan Stock Exchange ◽  
Using Data ◽  
The Relationship

This paper examines the relationship among managerial ownership, capital expenditures and firm performance using data of 359 firms listed on the Taiwan Stock Exchange over the period 1998-2005. The empirical results indicate a concave relationship between managerial ownership and future firm performance and a positive relationship between managerial ownership and capital expenditures. Moreover, for firms with larger capital expenditures, the interactive effect of managerial ownership and capital expenditures is significantly positively related to firm performance

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.

scholarly journals Board leadership structure and performance of Chinese firms in Singapore

2015 ◽  
Vol 12 (4) ◽  
pp. 617-629
Author(s):  
Ricky W. F. Pang ◽  
Abul F. M. Shamsuddin
Keyword(s):  
Firm Performance ◽  
Stock Exchange ◽  
Board Independence ◽  
Stewardship Theory ◽  
Chinese Firms ◽  
Ceo Duality ◽  
Board Leadership ◽  
Leadership Structure ◽  
And Performance ◽  
Board Leadership Structure

We examine the effects of board leadership structure on the performance of Chinese firms listed on the Singapore Stock Exchange. Using a sample of 105 firms covering 2009 to 2011, we find that CEO duality positively affects firm performance that can largely be explained by stewardship theory. There is also support for contingency theory as the CEO duality-firm performance relationship depends on whether Chinese firms are incorporated in Singapore or otherwise. This study offers insights for corporate regulators to soften their stance on the monitoring clauses concerning CEO duality. Major stakeholders in Singapore-based Chinese firms may need to bring some balance to board independence, board size, and the nomination process, particularly where CEO duality improves firm performance.

scholarly journals Interdependence between board and firm performance: evidence from the stock exchange of Tunisia

2008 ◽  
Vol 5 (4) ◽  
pp. 492-499
Author(s):  
Imene Lamiri ◽  
Hasna Chaibi ◽  
Hiba Khémiri
Keyword(s):  
Firm Performance ◽  
Stock Exchange ◽  
Simultaneous Equations ◽  
Board Independence ◽  
Board Structure ◽  
Reverse Causality ◽  
Quality Of Governance ◽  
And Performance ◽  
Different Characteristics

Recent empirical researches show a positive relationship between the quality of governance and firm performance. The objective of this research is to study the reverse causality between different characteristics of board and performance. Instead looking at one simple mechanism separately, we use a system of simultaneous equations in order to detect a possible endogeneity. In a panel of 36 traded firms at Tunis Stock Exchange between 2004 and 2006, our results show a significant interdependence between board size, board independence and firm performance. In addition, the 3SLS estimator allows us to conclude that board influences performance. Also, our results show that firms change their board structure in response to firm performance

scholarly journals CEO Compensation, Managerial Overconfidence and Performance of Sharia Compliant Firms and Non-Sharia Compliant Firms: Evidence from Listed GCC Firms

2021 ◽  
Vol 9 (10) ◽  
pp. 159-177
Author(s):  
Gaafar Mohamed Abdalkrim
Keyword(s):  
Firm Performance ◽  
Ceo Compensation ◽  
Positive Relationship ◽  
Positive Impact ◽  
Stock Exchange ◽  
Financial Report ◽  
Listed Firms ◽  
And Performance ◽  
Managerial Overconfidence ◽  
Exchange Data

Background: The positive relationship between managerial overconfidence and performance implies that overconfident managers overestimate their ability to create value and improve their firm’s performance, which also lead to overestimate their own firms returns by taking over other firms. Purpose: The study examines relationship between managerial overconfidence, CEO compensation, and performance of sharia compliant firms and non-sharia compliant firms for 207 GCC listed firms from 2010 to 2014. Methodology: The study sample comprised of 207 firms for the main empirical analysis. The data used in this study were collected from GCC stock exchange data-base and firms financial report provided by website argaam.com between 2010 and 2018. Findings: The study found that managerial overconfidence is positively and significantly related to firm performance. CEO compensation and managerial overconfidence is also associated positively with sharia–compliant firms’ performance. The findings supported first hypothesis that managerial overconfidence leads to better firms’ performance. Originality: The study has revealed a positive impact of sharia compliant firms’ managerial overconfidence on firm performance. Furthermore, the effect of CEO compensation is favorable in sharia compliant firms.

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