scholarly journals Active family control and company performance: the role of foreign investment moderation and bank debt

2018 ◽  
Vol 22 (1) ◽  
Author(s):  
Perminas Pengeran
Keyword(s):  
Family Firms ◽  
Stock Exchange ◽  
Foreign Ownership ◽  
Company Performance ◽  
Bank Debt ◽  
Family Control ◽  
The Family ◽  
The Relationship ◽  
Moderating Role

This study was to examine the moderating role of foreign ownership and Bank debt on the influence of active family control toward the family firm performance. Based on purposive sampling techniques, this study used 18 family firms listed in Indonesia Stock Exchange (IDX), during the period of 2006-2011. The results of this study showed several important findings. Firstly, foreign ownership positively moderated the effect of active family control on profitability. Secondly, likewise, bank debt negatively moderated the effect of active family control on profitability. Thirdly, foreign ownership negatively moderated the effect of active family control on dividends payment. Finally, bank debt positively moderated the influence of active family control on dividends payment. These results revealed that the foreign ownership and bank debt serves as moderator on the relationship between active family control and financial performance.

scholarly journals The Temporal Evolution of Proactiveness in Family Firms

2013 ◽  
Vol 27 (1) ◽  
pp. 35-50 ◽  
Author(s):  
Alfredo De Massis ◽  
Francesco Chirico ◽  
Josip Kotlar ◽  
Lucia Naldi
Keyword(s):  
Family Firms ◽  
Temporal Evolution ◽  
Family Members ◽  
Firm Age ◽  
Managerial Control ◽  
Contingency Perspective ◽  
The Family ◽  
The Relationship ◽  
Moderating Role

We extend prior work on proactiveness in family firms by examining the relationship between firm age and proactiveness. Specifically, we propose an S-shaped effect of aging of family firms on proactiveness. Additionally, we provide a contingency perspective by considering the moderating role of the dispersion of managerial control among family members. Using a sample of Swiss family firms, we find that proactiveness first declines, then increases, and finally decreases again as the family firm ages, and that this relationship is steeper when the managerial control is dispersed among multiple family members.

scholarly journals LEGITIMACY SIGNALS AND FAMILY IPO PERFORMANCES

2013 ◽  
Vol 14 (1) ◽  
pp. 156-181 ◽  
Author(s):  
Hung-bin Ding ◽  
Kuntara Pukthuanthong
Keyword(s):  
Family Firms ◽  
Management Practices ◽  
Stock Exchange ◽  
Legitimacy Theory ◽  
Business Research ◽  
Taiwan Stock Exchange ◽  
The Family ◽  
The Relationship ◽  
Technology Industries

The objective of this research is to examine the relationship between signals including governance and management practices and the performance of family firms IPOs. Using IPO data of 129 family firms and 129 comparable non-family firms from the Taiwan Stock Exchange, our findings highlighted the role of non-family insiders, or non-family affiliated directors in the IPOs of family firms. Our comparison between family and non-family IPOs shows hiring prestigious underwriters significantly improves the performance of family firm IPOs. Finally, we found the industries of IPO firms moderate the relationship between corporate governance characteristics and IPO performances, as non-family firms in technology industries are perceived to be more legitimate than their family counterparts. This paper makes three contributions to existing research. Firstly, we contribute to the legitimacy theory by suggesting an interaction effect between internal (organizational) and external (environmental) factors. Secondly, our analysis highlighted the roles of affiliated directors and industry in the performances of public family firms. Thirdly, this study contributes to the family business research by underscoring the differences between family and non-family firms in the IPO context.

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.

Family Firms and the Choice Between Wholly Owned Subsidiaries and Joint Ventures: A Transaction Costs Perspective

2018 ◽  
Vol 44 (2) ◽  
pp. 211-232 ◽  
Author(s):  
Maria Cristina Sestu ◽  
Antonio Majocchi
Keyword(s):  
Transaction Costs ◽  
Family Involvement ◽  
Family Firms ◽  
Joint Venture ◽  
Entry Modes ◽  
Family Control ◽  
The Family ◽  
Wholly Owned Subsidiary ◽  
Transaction Costs Economics

We examine the effects of family control on entry mode choice by integrating Transaction Costs Economics with the family business literature. Using a dataset of 951 foreign investments, we investigate the role of family involvement on entry modes. After controlling for endogeneity, we find that if both the investing and the local firm are family firms, forming a joint venture is preferred, while if only the investing firm is a family firm, a wholly owned subsidiary is more likely. Results show that family control has an important impact on entry modes, an hypothesis that has not yet been fully explored.

scholarly journals The Role of Political Connections on Family Firms’ Performance: Evidence from Indonesia

2019 ◽  
Vol 7 (4) ◽  
pp. 55 ◽  
Author(s):  
Iman Harymawan ◽  
Mohammad Nasih ◽  
Muhammad Madyan ◽  
Diarany Sucahyati
Keyword(s):  
Family Firms ◽  
Stock Exchange ◽  
Least Square ◽  
Political Connections ◽  
Family Ownership ◽  
Ols Regression ◽  
Ordinary Least Square ◽  
Relationship Of ◽  
The Relationship

The purpose of this study is to investigate the relationship of firms with family ownership and their performance in Indonesia and further examine on how political connections affect this relationship. This study used 933 samples from 413 companies listed on the Indonesia Stock Exchange (IDX) in the period between 2014 and 2016. Using ordinary least square (OLS) regression, the results shows that firms without family ownership (non-family firms) have better performance than firms with family ownership (family firms) in Indonesia. Furthermore, the findings also show that the performance of family firms significantly improve when the firms are affiliated with political connections. Our findings imply that establishing political connections in family firms will increase the performance of the firms.

scholarly journals Family Involvement in the Firm and Exports in the Family SME: Is the Manager’s International Orientation Influential?

2015 ◽  
Vol 7 (3) ◽  
pp. 69-99 ◽  
Author(s):  
Sami Basly
Keyword(s):  
Family Involvement ◽  
Family Firms ◽  
Positive Influence ◽  
International Orientation ◽  
The Family ◽  
Sample Data ◽  
Family Smes ◽  
Family Involvement In Management ◽  
The Relationship

AbstractDoes the family involvement affect exports in the family firm? The literature seems to support this view even if the direction and magnitude of this impact remains controversial. Drawing on the perspectives of agency [Chrisman et al. 2004; Schulze et al. 2001] and stewardship as applied to family firms [Davis, Schoorman and Donaldson 1997] and also on socio-emotional wealth perspective [Gómez-Mejía et al. 2007], this study seeks to contribute to this debate by studying the influence of family involvement on the SME exports intensity. To reconcile the divergent views, our research attempts to assess the role of the manager’s international orientation as a variable moderating the relationship between family involvement and exports in SMEs. Based on a hypothetical-deductive approach, the study uses a sample data of 125 family SMEs obtained through a questionnaire. The results show that even if the positive influence of the manager’s international orientation is corroborated, its moderating role seems to be limited to only one facet of the construct of family involvement i.e. involvement in management. Moreover, owning-family involvement in management seems to negatively influence exports while some results argue for a positive effect of the family involvement in ownership on exports.

scholarly journals Does the presence of independent directors reduce the practices of earnings management? The moderating role of family ownership concentration

2019 ◽  
Vol 69 (6) ◽  
pp. 638-654
Author(s):  
Deaa Al-Deen Al-Sraheen ◽  
Khaldoon Ahmad Al Daoud
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Ownership Concentration ◽  
Future Research ◽  
Family Ownership ◽  
Board Independence ◽  
New Ideas ◽  
The Relationship ◽  
Moderating Role

While often criticized, the independence of directors remains a crucial criterion for evaluating the effectiveness of the monitoring role of boards. This study examines the relationship between board independence and earnings management, paying attention to moderation role of family ownership concentration on this relationship using a sample of services companies listed on Amman Stock Exchange ASE. This study documented a significant and negative association between board independence and earnings management. In addition, the moderating role of family ownership concentration on this relationship was also negative. Thus, the board’s monitoring function was inefficient due to the concentration of ownership. These results were obtained through using multiple and sequential regression analysis for the research data from 2013 to 2016. This study provides new ideas for future research such as examining the impacts of the migration of capitals and investors from neighbouring countries such as Syria and Iraq.

scholarly journals Capital structure, corporate performance, and life cycle: Evidence from Indonesia

2017 ◽  
Vol 14 (4) ◽  
pp. 449-461
Author(s):  
Eko Suyono ◽  
Subba Reddy Yarram ◽  
Riswan Riswan
Keyword(s):  
Regression Analysis ◽  
Life Cycle ◽  
Interest Rate ◽  
Capital Structure ◽  
Institutional Ownership ◽  
Managerial Ownership ◽  
Company Performance ◽  
The Relationship ◽  
Moderating Role

This study aims to investigate firstly, the influences of company life cycle (i.e., pioneer, growth, mature, and decline) and set of control variables (i.e, tax level, interest rate, institutional ownership, and managerial ownership) on capital structure; secondly, the influence of capital structure on company performance; and thirdly, the moderating role of each stage of the company life cycle on the relationship between capital structure and company performance. Implementing quantitative approach by using OLS Regression Analysis and Moderated Regression Analysis (MRA) on a set of the sample that consists of 157 Indonesian non-financial listed firms for 2010-2015 periods (942 firm years), findings show that company life cycle has a significant influence on capital structure. While for control variables, tax level and institutional ownership have a positive influence on the capital structure, wherein interest rate and managerial ownership have a negative effect on capital structure. Moreover, capital structure ratio influences positively on company performance. Finding also documents that pioneer and growth stages have a moderating role in strengthening the influence of capital structure on company performance, while mature and decline stages have a moderating role in weakening the influence of capital structure on company performance. This study provides important implications for corporations and business practitioners with regard to the best choice in the composition of capital structure which is able to improve company performance. On the best of our knowledge, it is the first study testing the moderating role of company life cycle on the relationship between capital structure and company performance.

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