scholarly journals Are Family Firms Financially Healthier Than Non-Family Firm?

2019 ◽  
Vol 13 (1) ◽  
pp. 5 ◽  
Author(s):  
Lious Agbor Tabot Ntoung ◽  
Helena Maria Santos de Oliveira ◽  
Benjamim Manuel Ferreira de Sousa ◽  
Liliana Marques Pimentel ◽  
Susana Adelina Moreira Carvalho Bastos
Keyword(s):  
Lower Risk ◽  
Family Firms ◽  
Balance Sheet ◽  
Medium Size ◽  
Z Score ◽  
Data Set ◽  
Business Operations ◽  
Robust Tests ◽  
Analysis System ◽  
Lower Ratio

This study examines the whether or not family firms are financially healthier than non-family in terms of capital structure and leverage. It therefore takes into consideration the existence of any significant differences between the leverage and risk choices of family and non-family firms. Using a panel data set of 888 firms and 7104 firm-year observations of unlisted small and medium size firms over the period 2007–2014, we present that family owned businesses have lower financial structure than those of non-family owned businesses. This indicates that most family firms use less debt financing than non-family firms, and as such maintain a lower level of debt. Secondly, family firms demonstrate lower risk as illustrated by the Altman Z-score. The Altman Z-score scale illustrates a contrary relationship of significance with respect to family firms and their counterparts in terms of the operation aspect of the business’s risk factors. Family firms managed their business operations with lower risk and are generally healthier financially than their counterpart firms. Lastly, findings from the robust tests for the hypotheses using a sample of bankrupt firms in Iberian Balance sheet Analysis System (SABI) reveal that the proportion of failure of family firms as opposed to their counterpart firms is relatively low. Analyzing the bankruptcy files of firms from 2002 to 2014 shows a considerably low ratio of family firms at the 5% significant level. This affirms that the low risk illustrated in the Altman Z-score regression is consistent to the lower ratio of family firms that were declared bankrupted over the study period, which makes Spain an important case in this study.

Intellectual capital in family firms: human capital identification and measurement

2015 ◽  
Vol 16 (1) ◽  
pp. 199-223 ◽  
Author(s):  
Enrique Claver-Cortés ◽  
Patrocinio Carmen Zaragoza-Sáez ◽  
Hipólito Molina-Manchón ◽  
Mercedes Úbeda-García
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Family Firms ◽  
Balance Sheet ◽  
Research Approach ◽  
Competitive Advantages ◽  
Content Type ◽  
Starting Point ◽  
Practical Implications

Purpose – Based on the literature devoted to family firms and the intellectual capital-based view of the firm, the purpose of this paper is not only to identify the most important human capital intangibles owned by family firms but also to show a number of indicators that can help measure them. Design/methodology/approach – A qualitative case-study-based research approach was adopted taking as reference: 25 family firms belonging to different sectors; previous works existing in the literature; and the intellectus model. Findings – The present study identifies ten intangibles associated with the human capital of family firms and shows 60 indicators that can be used to measure them. It additionally provides empirical evidence and gives examples of these intangibles through the analysis of 25 international family firms. Research limitations/implications – The difficulty in collecting all the human capital intangibles of family firms; the problems associated with the creation of accurate indicators; and those specific to the research methodology adopted. Practical implications – Identifying the human capital intangibles of family firms and their indicators can help managers become aware of their importance, and this will consequently help them improve their management. This could be an interesting starting point to value these intangibles in the balance sheet as well as to draw comparisons between family and non-family organisations. Originality/value – The framework provided by family firms sheds light on several intangibles specific to these firms – precisely for their condition as “family” firms. Those intangibles – human capital intangibles being especially highlighted in this study – provide the basis for the achievement of competitive advantages.

scholarly journals Sustainability and Business Outcomes in the Context of SMEs: Comparing Family Firms vs. Non-Family Firms

2018 ◽  
Vol 10 (11) ◽  
pp. 4080 ◽  
Author(s):  
María López-Pérez ◽  
Iguácel Melero-Polo ◽  
Rosario Vázquez-Carrasco ◽  
Jesús Cambra-Fierro
Keyword(s):  
Business Models ◽  
Family Firms ◽  
Medium Size ◽  
Stewardship Theory ◽  
Business Practices ◽  
Socially Responsible ◽  
Business Outcomes ◽  
Proposed Model ◽  
Moderator Role

Society is demanding more sustainable and socially responsible business models. Therefore, the concept of sustainability has become a cornerstone to help understand the success of many firms in the current competitive context. However, the context of SMEs has received little attention thus far. In order to solve this gap this article analyses the links between sustainability practices and business outcomes—both financial and non-financial (i.e., image and reputation)—for small and medium-size enterprises (SMEs). In addition, the study strives to analyze the potential differences between family firms and non-family firms. To this end, a quantitative study is carried out using PLS techniques to analyze a sample of SME owners and managers with a view to testing the proposed model based on the Stewardship Theory and Socioemotional Wealth Theory. In this sense, our study is pioneering in that it aims to assess—from a quantitative viewpoint—the moderator role of family firms on a series of relevant sustainability-driven outcomes. The data suggest that, in SME contexts, sustainability influences the corporate reputation, brand image, and financial value of the company. Importantly, we find that the profile (family vs. non-family) of the firm moderates the links between sustainability and business outcomes. Hence, our findings have important implications for sustainability implementation in SME contexts. Finally, we provide a series of guidelines aimed at maximizing the effectiveness of sustainability-based business practices.

scholarly journals Divergencia empresarial en la productividad total de los factores en el período de crisis y recuperación económica en el sector turístico español

2021 ◽  
Vol 19 (1) ◽  
pp. 27-42
Author(s):  
Albert Miró ◽  
Keyword(s):  
Information And Communication Technologies ◽  
Balance Sheet ◽  
Economic Recovery ◽  
Current Debate ◽  
Trade Theory ◽  
Economic Sectors ◽  
Tourism Sector ◽  
Ict Adoption ◽  
Information And Communication ◽  
Analysis System

The main aim of this research is to contrast the existence of a positive relationship between the total factor productivity (TFP) of companies in the Spanish tourism sector and their use of Information and Communication Technologies (ICT). in the understanding that the trend is for companies to opt for ICT in‑ vestment and development to improve their TFP and their interaction with the international market (export and import) also leads to an improvement in TFP in the context of the “New” new trade theory. Likewise, the current debate on the dispersion of TFP has affected all economic sectors. In this case, the hy‑ pothesis revolves around the existence of a divergence of this variable between a period of crisis (2007‑2011) and a period of economic recovery (2012‑2017). The data from the Iberian Balance Sheet Analysis System (SABI) were extracted fto the ends of the correct development of this research which has allowed the TFP to be estimated using MCO, EF and LP, as well as the correct verification of the hypotheses using the SEM method. Three conclusions are reached: i) that the Spanish tourism sector seems to have a low level of ICT adoption in its business structure; ii) that TFP dispersion is demonstrated with respect to the two subperiods analysed (crisis and economic recovery), and that iii) internationalisation has a significant result on TFP.

Financial soundness of Islamic banks: does the structure of the board of directors matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Afef Khalil ◽  
Imen Ben Slimene
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Islamic Banks ◽  
Z Score ◽  
Data Set ◽  
Content Type ◽  
Additional Hypothesis ◽  
The Board Of Directors ◽  
Financial Soundness ◽  
The Impact

Purpose The purpose of this paper is to examine the Board of Directors’ characteristics and their impact on the financial soundness of Islamic banks. Design/methodology/approach Regression analysis is applied to test the impact of the Board of Directors’ characteristics on the financial soundness of Islamic banks, using a panel data set of 67 Islamic banks covering 20 countries from 2005 to 2018. The Z-score indicator is used to evaluate the Islamic banks’ soundness. To check the robustness of the results, this paper uses other dependent variables (CAMEL) than the Z-score. Findings The main results show that the presence of an independent non-executive director negatively impacts the financial soundness of Islamic banks, while the chief executive officer duality practice has a positive effect on it. Other characteristics of the Board of Directors do not significantly impact the financial soundness of Islamic banks (foreign director, institutional director, chairman with a Shari’ah degree, interlocked chairman and the Board of Directors’ size). Practical implications This study aims to fill the gaps in the literature that discuss the Board of Directors’ role in corporate governance and its impact on the financial soundness of Islamic banks. In other words, it shows the role played by the Board of Directors and improves the knowledge of the corporate governance-financial soundness relationship. Plus, managers, investors and regulators may gain evocative insights, particularly those looking to improve their Islamic banks’ soundness by restructuring their boards’ composition. Originality/value This study sheds new light on the literature on Islamic banking by clarifying the relationship between the Board of Directors and the financial soundness of Islamic banks. Contrary to previous research, this paper uses an additional hypothesis stating that a chairman with a Shari’ah degree (Fiqh Muamalt) has a positive impact on the financial soundness of Islamic banks.

Strategic Behavior in Family Firms

2022 ◽  
pp. 974-996
Author(s):  
Ismael Barros ◽  
Juan Hernangómez ◽  
Natalia Martín Cruz
Keyword(s):  
Knowledge Management ◽  
Strategic Behavior ◽  
Family Firms ◽  
Family Influence ◽  
Organizational Routines ◽  
Business Operations ◽  
Management Processes ◽  
The Family ◽  
Prior Literature ◽  
The Relationship

Previous research emphasizes that the participation of the family in business operations is the source of resources and capabilities that conditions the strategic behavior of the family firm. This influence has been recognized as “familiness.” However, this definition is contextualized from static reasoning that ignores the effect of family dynamics on the behavior and value generation of the family-owned business. Prior literature has recognized that the family influence has a dynamic character based on the idiosyncratic process of knowledge management that manifests itself in the company, dynamic familiness. This family capability is shaped by family organizational routines through the family influence and aims to increase its knowledge portfolios for the strategic use of its resources. This chapter addresses the relationship between family influence and the process of learning and knowledge management. The analysis of this relationship allows assessing how family influence can promote the generation of family organizational routines based on knowledge management processes.

High leverage and variance of SMEs performance

2019 ◽  
Vol 20 (2) ◽  
pp. 155-175 ◽  
Author(s):  
Mazen Gharsalli
Keyword(s):  
Firm Performance ◽  
Small Business ◽  
Firm Growth ◽  
Family Firms ◽  
Global Financial Crisis ◽  
Cash Flows ◽  
Data Set ◽  
Content Type ◽  
Good Investment ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between leverage and firm performance using small business data from France by estimating the effects of leverage on both average firm performance and the variance of firm performance. Design/methodology/approach Focusing on French small- and medium-sized enterprises (SMEs), which tend to be dependent on bank loans, the authors examine the relationship between leverage and firm performance. This study was based on a unique panel data set of more than 2,157 manufacturing SMEs covering the years 2007-2015. The authors estimate the effects of leverage on both average firm performance and the variance of firm performance. Findings Focusing on the average effects of leverage, the authors find that highly leveraged firms suffer from poor performance. In addition, the variance in firm performance is higher if firms are highly leveraged. Results also underline that leveraged firms are better performers when they have sufficient collateral assets. Research limitations/implications The study, however, has also some limitations. The first one is that the findings were obtained for only one industry sector, so attempts should be made to study the issue, as it applies to other sectors as well. Second is the context where the study was conducted. This study has been conducted based on data gathered from SMEs in France within a specific socioeconomic context (2007-2008 global financial crisis), which may also limit the generalizability of the results for different contexts with different socioeconomic situations. It would also be useful, to have a better explanation for the performance of SMEs, to add to the model more financial variables or other types of variables such as those related to managerial skills or to the macro-economic environment. Finally, further research could examine the joint impact of both leverage and ownership structure on firm’s performance as a large number of French firms are family firms. The limitations of this study, however, can in fact be an opportunity for future researchers to conduct studies addressing those limitations. Practical implications This research has some implications for small business lending. SME owners and managers may, on the one hand, be encouraged by the fact that collateral assets can reduce agency costs, thereby positively affecting firm performance. On the other hand, high leverage can facilitate firm growth if firms have collateral assets. This implies that policymakers interested in stimulating SMEs should develop more suitable collaterals for high-risk SMEs with low asset tangibility. Social implications The results also have implications for financial institutions. To prevent unexpected and extensive bankruptcies, banks might classify firms with negative cash flows as borrower in danger of bankruptcy. However, the results show that highly leveraged firms with good investment opportunities and high collateral assets reduce the probability of bankruptcy. This implies that banks need to evaluate the credit risk of very highly leveraged small businesses more carefully. Originality/value It should be noted that the case of France remains marginal in terms of the conducted studies.

scholarly journals Health Check-up of Commercial Banks in the Framework of CAMEL: A Case Study of Joint Venture Banks in Nepal

2007 ◽  
Vol 2 (1) ◽  
pp. 41-55 ◽  
Author(s):  
Keshar J. Baral
Keyword(s):  
Commercial Banks ◽  
Large Scale ◽  
Joint Venture ◽  
Balance Sheet ◽  
Health Check ◽  
Annual Reports ◽  
Financial Health ◽  
Data Set ◽  
Business Studies

Using the data set published by joint venture banks in their annual reports, and NRB in its supervision annual reports, this paper examines the financial health of joint venture banks in the CAMEL framework. The health check up conducted on the basis of publicly available financial data concludes that the health of joint venture banks is better than that of the other commercial banks. In addition, the perusal of indicators of different components of CAMEL indicates that the financial health of joint venture banks is not so strong to manage the possible large scale shocks to their balance sheet and their health is fair. Journal of Nepalese Business Studies Vol.2(1) 2005 pp.41-55

Learnings From Data Management and Integration Efforts on the Enbridge Pipeline System

2004 ◽  
Author(s):  
Garry L. Sommer ◽  
Brad S. Smith
Keyword(s):  
Data Management ◽  
Management Program ◽  
Pipeline System ◽  
Data Set ◽  
Data Alignment ◽  
Commercial Market ◽  
History Of ◽  
Integrity Management ◽  
Management Effort ◽  
Analysis System

Enbridge Pipelines Inc. operates one of the longest and most complex pipeline systems in the world. A key aspect of the Enbridge Integrity Management Program (IMP) is the trending, analysis, and management of data collected from over 50 years of pipeline operations. This paper/presentation describes Enbridge’s challenges, learnings, processes, and innovations for meeting today’s increased data management/integration demands. While much has been written around the premise of data management/integration, and many software solutions are available in the commercial market, the greatest data management challenge for mature pipeline operators arises from the variability of data (variety of technologies, data capture methods, and data accuracy levels) collected over the operating history of the system. Ability to bring this variable data set together is substantially the most difficult aspect of a coordinated data management effort and is critical to the success of any such project. Failure to do this will result in lack of user confidence and inability to gain “buy-in” to new data management processes. In 2001 Enbridge began a series of initiatives to enhance data management and analysis. Central to this was the commitment to accurate geospatial alignment of integrity data. This paper/presentation describes Enbridge’s experience with development of custom software (Integrated Spatial Analysis System – ISAS) including critical learnings around a.) Data alignment efforts and b.) Significant efforts involved in development of an accurate pipe centreline. The paper/presentation will also describe co-incident data management programs that link to ISAS. This includes enhanced database functionality for excavation data and development of software to enable electronic transfer of data to this database. These tools were built to enable rapid transfer of field data and “real time” tool validation through automated unity plots of tool defect data vs. that measured in the field.

scholarly journals Situación de endeudamiento de las organizaciones de gestión de instalaciones deportivas de ocio no competitivo. Un estudio empírico

2018 ◽  
pp. 41-48
Author(s):  
M. Grimaldi-Puyana ◽  
P. Gálvez-Ruiz ◽  
A. J. Sánchez-Oliver ◽  
V. Alcaraz-Rodríguez
Keyword(s):  
Balance Sheet ◽  
Economic Situation ◽  
Golf Courses ◽  
Sports Organizations ◽  
The Past ◽  
Economic Information ◽  
Lack Of Control ◽  
The Status ◽  
Analysis System ◽  
Existing Data

La gestión de la deuda en las organizaciones deportivas es una variable determinante para la supervivencia de éstas, la falta de control puede afectar al buen funcionamiento de una entidad. Según los datos existentes, las organizaciones que gestionan campos de golf gozan de una buena situación económica. Por ello, el propósito del presente estudio fue conocer el estado y evolución de la deuda de las empresas deportivas que participan en el deporte del golf no competitivo. Para ello, se seleccionó una muestra de 93 organizaciones de todo el territorio Español, con una antigüedad media de 20,08 años. Para la obtención de los datos se utilizó la información económica del Sistema de Análisis de Balances Ibéricos de la pasada década. Los hallazgos obtenidos en el presente estudio nos llevan a conocer que la deuda media de las organizaciones ha aumentado en el 70,5% de los casos después de una década. A pesar de la buena salud económica y al aumento de sus ingresos por explotación y total de activos en el período de estudio, podemos afirmar que la deuda de estas organizaciones ha aumentado exponencialmente entre el 2005-2015. The management of the debt in sports organizations are determinant variables for the survival of these, the lack of control can affect the proper functioning of an entity. According to the existing data, the organizations that manage golf courses enjoy a good economic situation. Therefore, the purpose of this study was to know the status and evolution of the debt of sports companies that participate in the sport of non-competitive golf. For this, a sample of 93 organizations throughout the Spanish territory was selected with an average age of 20,08 years. In order to obtain the data, the economic information of the Iberian Balance Sheet Analysis System of the past decade was used. From the findings obtained in the present study, an increase in the average debt of the organizations of 70,5% follows after a decade. In spite of the good economic health and the increase of its income by exploitation and total of assets in the period of study, we can affirm that the debt of these organizations has increased exponentially between 2005-2015.

Linkage between business sustainability and tacit knowledge management in MSMEs

2019 ◽  
Vol 50 (3) ◽  
pp. 477-494
Author(s):  
Parijat Upadhyay ◽  
Amit Kundu
Keyword(s):  
Knowledge Management ◽  
Business Processes ◽  
Developing Economies ◽  
Data Set ◽  
Content Type ◽  
Business Sustainability ◽  
Medium Scale ◽  
Study Approach ◽  
Business Operations ◽  
Medium Enterprise

Purpose The purpose of this study is to report the apparent linkage between knowledge management (KM) practices in a semi-structured sector and business sustainability. Micro, small and medium scale enterprises in developing economies are constrained by accessibility to resources and have not been able to reap the benefits of structured KM practices to fine-tune their business processes. Insights derived from business operations of such enterprises can be formalized into relevant knowledge creation. An effective KM can help in revival strategies for many traditional organizations like handloom that operate as a co-operative. Such business has come under immense challenges from new-age organizations in that particular sector. This study reports the brand revival and business sustainability journey of a handloom co-operative through effective knowledge assimilation and dissemination. Design/methodology/approach In this paper, the authors have assessed the governance of small co-operative units in handloom and their supervision, which pose serious challenges for business sustainability. Their business data pertaining to productivity, sales and income for the period from 1997-1998 to 2015-2016 have been analyzed for business sustainability. A time-series analysis has been done on the above data set to track business sustainability of the handloom co-operative. The findings have been analyzed through a case-based study approach. Findings Over a period of one and half-decade, the handloom co-operative has been able to improve its product offering, which, in turn, led to the revival of the brand. Such transformation has resulted in revival of decades old brand through effective knowledge sharing, which is mainly tacit in nature. This case study based paper showcases that despite their inherent constraints, micro, small and medium enterprise organizations (many of which are semi-structured or unstructured in nature) can reap huge benefits by making efforts to put in place an effective KM mechanism. Originality/value There are very few reported studies, which have explored the linkage between tacit KM practices and business sustainability. Studies in context to a semi-structured small- and medium-scale enterprises are not available in published literature.

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