The Role of Family Ownership in Survival and Bouncing Back

2022 ◽  
pp. 130-152
Author(s):  
María Iborra ◽  
Vicente Safón ◽  
Consuelo Dolz
Keyword(s):  
Family Firms ◽  
Good News ◽  
Family Ownership ◽  
Stressful Event ◽  
Positive Role ◽  
Bankruptcy Risk ◽  
Negative Effect ◽  
Litmus Test ◽  
The Relationship

The latest global economic and financial crisis has been a litmus test for companies, especially for SMEs. These companies have had to demonstrate their ability to be resilient, surviving first and then recovering. This chapter studies the role of family ownership in the survival and recovery of SMEs during a stressful event. From a perspective based on the complementarity or substitutability of goals that family firms pursue, the authors propose that family ownership has a positive effect on survival but a negative effect on recovery. Furthermore, they propose that the risk of bankruptcy before a crisis moderates the relationship between family ownership and survival. Hypotheses have been tested with a dataset of 3,133 Spanish manufacturing MEs finding evidence for the positive role of family ownership in survival and for the moderating effect of previous bankruptcy risk. The empirical data confirms good news for family-owned firms.

The Role of Family Ownership in Survival and Bouncing Back

2020 ◽  
pp. 261-282
Author(s):  
María Iborra ◽  
Vicente Safón ◽  
Consuelo Dolz
Keyword(s):  
Family Firms ◽  
Good News ◽  
Family Ownership ◽  
Stressful Event ◽  
Positive Role ◽  
Bankruptcy Risk ◽  
Negative Effect ◽  
Litmus Test ◽  
The Relationship

The latest global economic and financial crisis has been a litmus test for companies, especially for SMEs. These companies have had to demonstrate their ability to be resilient, surviving first and then recovering. This chapter studies the role of family ownership in the survival and recovery of SMEs during a stressful event. From a perspective based on the complementarity or substitutability of goals that family firms pursue, the authors propose that family ownership has a positive effect on survival but a negative effect on recovery. Furthermore, they propose that the risk of bankruptcy before a crisis moderates the relationship between family ownership and survival. Hypotheses have been tested with a dataset of 3,133 Spanish manufacturing MEs finding evidence for the positive role of family ownership in survival and for the moderating effect of previous bankruptcy risk. The empirical data confirms good news for family-owned firms.

The Role of Family Ownership in Survival and Bouncing Back

2021 ◽  
pp. 1117-1138
Author(s):  
María Iborra ◽  
Vicente Safón ◽  
Consuelo Dolz
Keyword(s):  
Family Firms ◽  
Good News ◽  
Family Ownership ◽  
Stressful Event ◽  
Positive Role ◽  
Bankruptcy Risk ◽  
Negative Effect ◽  
Litmus Test ◽  
The Relationship

The latest global economic and financial crisis has been a litmus test for companies, especially for SMEs. These companies have had to demonstrate their ability to be resilient, surviving first and then recovering. This chapter studies the role of family ownership in the survival and recovery of SMEs during a stressful event. From a perspective based on the complementarity or substitutability of goals that family firms pursue, the authors propose that family ownership has a positive effect on survival but a negative effect on recovery. Furthermore, they propose that the risk of bankruptcy before a crisis moderates the relationship between family ownership and survival. Hypotheses have been tested with a dataset of 3,133 Spanish manufacturing MEs finding evidence for the positive role of family ownership in survival and for the moderating effect of previous bankruptcy risk. The empirical data confirms good news for family-owned firms.

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.

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 Ownership and Tax Avoidance: An Analysis of Foreign Related Party Transactions and Dividend Payments

2020 ◽  
Vol 21 (2) ◽  
pp. 643-659
Author(s):  
Nuritomo ◽  
Sidharta Utama ◽  
Ancella A, Hermawan
Keyword(s):  
Family Firms ◽  
Tax Avoidance ◽  
Moderating Effect ◽  
Family Ownership ◽  
Tax Burden ◽  
Related Party Transactions ◽  
Dividend Payments ◽  
Negative Effect ◽  
The Relationship ◽  
Positive Effect

This paper aims to investigate the effect of shareholder tax burden on related party transactions (RPTs) and dividend payments in Indonesia. The paper also investigates the moderating effect of family ownership on the relationship between shareholder tax burden, RPTs and dividend payments. The study uses 451 firm-year observations comprising hand-collected data for the period 2010–2015. The results suggest that a high shareholder tax burden has a positive effect on RPTs and a negative effect on dividend payments. This indicates that companies engage in tax avoidance through dividend minimization and RPTs. When faced with a high tax burden, companies tend to reduce dividends and increase their RPTs in a bid to reduce their tax burden. This research also shows that the  positive effect of shareholder tax burden on RPTs is weakened with greater family ownership and that the negative effect of shareholder tax burden on dividend payments is strengthened by greater family ownership. This proves that Indonesian family firms tend to engage in tax avoidance through the use of dividend mechanisms as opposed to RPTs.

Influence of Confucian culture on entrepreneurial decision making using data from China's floating population

2020 ◽  
Vol 48 (7) ◽  
pp. 1-12
Author(s):  
Ran Xiong ◽  
Ping Wei
Keyword(s):  
Decision Making ◽  
Floating Population ◽  
Positive Role ◽  
Confucian Culture ◽  
Chinese Nation ◽  
Using Data ◽  
Entrepreneurial Decision ◽  
And Behavior ◽  
The Relationship

Confucian culture has had a deep-rooted influence on Chinese thinking and behavior for more than 2,000 years. With a manually created Confucian culture database and the 2017 China floating population survey, we used empirical analysis to test the relationship between Confucian culture and individual entrepreneurial choice using data obtained from China's floating population. After using the presence and number of Confucian schools and temples, and of chaste women as instrumental variables to counteract problems of endogeneity, we found that Confucian culture had a significant role in promoting individuals' entrepreneurial decision making among China's floating population. The results showed that, compared with those from areas of China not strongly influenced by Confucian culture, individuals from areas that are strongly influenced by Confucian culture were more likely to choose entrepreneurship as their occupation choice. Our findings reveal cultural factors that affect individual entrepreneurial behavior, and also illustrate the positive role of Confucianism as a representative of the typical cultures of the Chinese nation in the 21st century.

scholarly journals Limiting role of resource dependence: an examination of director interlocks, board meetings and family ownership

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Vidya Sukumara Panicker ◽  
Rajesh Srinivas Upadhyayula
Keyword(s):  
Board Of Directors ◽  
Resource Dependence ◽  
Family Firms ◽  
Emerging Market ◽  
Resource Provisioning ◽  
Independent Directors ◽  
Family Ownership ◽  
Independent Director ◽  
Content Type

PurposeThis paper attempts to examine the activity and involvement of board of directors in internationalization activities of firms in emerging markets, by evaluating the resource provisioning roles of interlocks provided by board of directors, and the frequency of board meetings. We demonstrate that the effectiveness of board involvement is contingent upon the levels of family ownership in firms since family ownership could impact the firm’s ability to utilize the presence of different types of board members.Design/methodology/approachThe authors test our hypotheses on a sample of listed Indian companies, extracted from the Prowess database published by the Centre for Monitoring Indian Economy (CMIE), a database of the financial performance of Indian companies. On a panel of 3,133 firm years of 605 unique Indian firms with foreign investments, over a time period of 2006–2017, the authors apply different estimation techniques.FindingsThe results demonstrate that both board meeting frequency and director interlocks are instrumental in supporting internationalization activities in emerging market firms. However, family ownership moderates the role of insider and independent interlocks on internationalization investments in different ways; the authors find that interlocks provided by independent directors support internationalization activities in family firms, whereas those provided by insider directors do not. Further, the study also finds that board meetings are less effective in internationalization of family firms.Practical implicationsThe authors conclude that family firms aiming at international diversification require to develop more connected and networked independent directors to enable internationalization in firms. While independent director interlocks enhance the international investments, it is also useful to know that board meetings are ineffective in utilizing the resources in family firms. This points to the possibility that family firms should device mechanisms to integrate family meetings with board meetings so that they can utilize the within-family processes to aid in their internationalization decisions.Originality/valueThe study contributes to resource dependence theory by understanding its limiting role in family firms. Theoretically, it helps delineate the limiting resource provision role of the insider directors vis-à-vis independent directors. The authors argue that the resource provision role of insider director interlocks does not effectively help in internationalization in comparison to independent director interlocks in family-dominated firms. Consequently, the study shows the limiting role of resource provision and utilization by family-owned firms in comparison to non-family-owned firms.

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.

scholarly journals The positive role of hope on the relationship between loneliness and unhappy conditions in Hungarian young adults: How pathways thinking matters!

2018 ◽  
Vol 14 (6) ◽  
pp. 724-733 ◽  
Author(s):  
Edward C. Chang ◽  
Olivia D. Chang ◽  
Tamás Martos ◽  
Viola Sallay ◽  
Ingo Zettler ◽  
...  
Keyword(s):  
Young Adults ◽  
Positive Role ◽  
The Relationship

scholarly journals Examining the Mediation of Job Satisfaction in the Relationship between Work Stress and Turnover Intention in Textile Company

2020 ◽  
Vol 5 (2) ◽  
pp. 113-121
Author(s):  
Romat Saragih ◽  
Arif Partono Prasetio ◽  
Bachruddin Saleh Luturlean
Keyword(s):  
Job Satisfaction ◽  
Work Stress ◽  
Turnover Intention ◽  
Sampling Method ◽  
Sampling Technique ◽  
Jel Classification ◽  
Positive Direction ◽  
Negative Effect ◽  
The Relationship

Objective – This study investigates the mediation role of job satisfaction in the relationship between work stress and turnover intention. A study about turnover intention in the textile company is still rarely done in Indonesia. This study can fill the gap regarding the topic. Methodology/Technique – A nonprobability sampling method with an accidental sampling technique was used, and we get 110 usable responses from a textile company in West Java, Indonesia. Macro Process with SPSS was used to measure the regression and the mediation. Findings – The study found that work stress has a negative effect on job satisfaction. Work stress significantly related to turnover intention in a positive direction. Job satisfaction did not have a significant relation with turnover intention. Thus, in this study, we found no mediation role in job satisfaction. Novelty – Evidently, work stress solely took part in shaping the turnover intention. Type of Paper: Empirical. Keywords: Work stress, Job satisfaction, Turnover intention, Textile Company, Mediation Reference to this paper should be made as follows: Saragih, R; Prasetio, A.P; Luturlean, B.S. 2020. Examining the Mediation of Job Satisfaction in the Relationship between Work Stress and Turnover Intention in Textile Company, J. Mgt. Mkt. Review 5(2) 113 – 121. https://doi.org/10.35609/jmmr.2020.5.2(4) JEL Classification: J28, J29, M19.

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