The Effect of Ownership Structure on Disclosure Quality and Credit Ratings in Family Firms: The Moderating Role of Auditor Choice

Despite the substantial degree of heterogeneity within family firms, little is known about how their heterogeneity affects firm behavior and the implication for the shareholder–debtholder agency problem. Our study contributes to the literature by examining whether family firms with a higher level of control-ownership divergence would disclose less information and whether Big 4 auditors play a moderating role in mitigating the negative impact of control-ownership divergence on disclosure quality resulting in improved credit ratings. Using data from the emerging economy of Taiwan, we provide support for our three hypotheses. Our contributions will interest family firm owners, researchers, auditors, and policymakers.

The Mediating Effect of Coping Strategies Between Psychological Capital and Small Tourism Organization Resilience: Insights From the COVID-19 Pandemic, Malaysia

Amid difficulty, the psychological capital of small tourism firm owners/managers has been given less attention. In the coronavirus disease-2019 (COVID-19) pandemic, this research examined how psychological capital (self-efficacy, hope, optimism, and resilience) affects organizational resilience. By structural equation modeling (AMOS 21.0), 644 small tourism firm owners in Malaysia were randomly selected to investigate the relationship between psychological capital and organizational resilience, and the mediating effect of problem-focused and emotion-focused coping strategies on this relationship. The findings of the study supported hypothesized relationships, as the psychological capital of small tourism firm owners in Malaysia significantly affects organizational resilience. Furthermore, the study discovered that problem-focused and emotion-focused coping strategies have partial mediating effects on the association between psychological capital and organizational resilience. In the context of small tourism businesses sector, the findings of the study have implications, as the firms identify the recovery procedure in the COVID-19 pandemic.

Contribution of Life Cycle Knowledge towards Environmental Performance of ISO 14001 Certified Malaysian Companies: Analysis of ISO 14001 and Selected Life Cycle Management Tools

The ability to enhance environmental performance has emerged as a pivotal corporate strategy for businesses in Malaysia. While the ISO 14001:2015 has been promoted extensively by the Malaysian Department of Standards, its adoption remains low and at a slow pace. There is scarce research to demonstrate the linkage between environmental knowledge, the implementation of life cycle management tools and environmental performance. Therefore, the first aim of this study is to assess the different knowledge levels of respondents on ISO 14001:2015 and four assessment methodologies (i.e., Life Cycle Assessment, Carbon Footprint, Water Footprint, and Material Flow Cycle Accounting). The second aim is to determine whether these knowledge bases contribute to the firms’ environmental performance. A total of 157 ISO-certified firm owners responded to the self-administered questionnaires. A One-Way ANOVA test revealed a difference in knowledge levels, with Life Cycle Assessment having the highest score and Material Flow Cycle Accounting having the lowest. Multiple regression revealed ISO 14001, Material Flow Cycle Accounting, and Carbon Footprint knowledge to contribute to environmental performance significantly. Counterintuitively, Life Cycle Assessment and Water Footprint exerted no significance on environmental performance. Policy implications include information dissemination and training by governmental officials for firm owners and exposure to life cycle management tools.

The Cyberdivisions Produced by the Design of VGI under the Platform Economy: The Case of the Restaurant Sector in TripAdvisor

There is increasing concern regarding the inequalities produced by digital platforms based on volunteered geographic information (VGI). Several forms of inequalities have been observed, namely the unequal spatial coverage and the uneven levels of usage even in territories with good coverage. However, VGI platforms under the logic of platform economy have generated other forms of spatial inequality that require more attention. The cyberspace within VGI platforms is producing different cyberspatialities, especially with the platformisation processes that have made this type of inequality more evident. With this in mind, this paper aims to explore the making of cyberdivisions under the platform economy. We argue that the design of VGI within digital platforms is generating cyberdivisions in the urban economy. This research is particularly interested in exploring the restaurant sector in the TripAdvisor platform in the city of Lisbon. In this paper, we draw on a representative survey by questionnaire to restaurant firm owners. We obtained 385 responses out of a universe of 3453 restaurants. This sample provides a confidence level of 95% and a confidence interval of 5%. In addition, we webscraped data from TripAdvisor to assess its coverage in Lisbon. This study reveals that there are different forms of online presence and engagement which have generated cyberdivisions.

Managerial Style and Attention

Is firm behavior mainly driven by its environment or rather by the characteristics of its managers? We develop a cognitive theory of manager fixed effects, where the allocation of managerial attention determines firm behavior. We show that in complex environments, the endogenous allocation of attention exacerbates manager fixed effects. Small differences in managerial expertise then may result in dramatically different firm behavior, as managers devote scarce attention in a way that amplifies initial differences. In contrast, in less complex environments, the endogenous allocation of attention mitigates manager fixed effects. Firm owners prefer “managers with style” only in complex environments. (JEL D21, D23, G34, M10, M31, M54)

Auditors, Underwriters, and Firm Owners’ Interaction in an IPO Environment: The Case of OECD Nations

This study explores the effects of interactions among key stakeholders, i.e., auditors, underwriters, and firm owners on IPOs’ first-day returns in selected OECD nations. It also examines the alteration effects of legal origin (Common law and Civil law) on the relationship between the interacted key stakeholders and IPOs’ first-day returns. A total of four thousand one hundred and sixty-four IPOs from twenty-eight OECD nations are included in this study. Since it is cross-sectional data, a two-stage least square regression is applied. The empirical outcomes indicate that, in general, the interacted reputable underwriters and auditors have a positive impact on IPOs’ first-day return. The relationship is modified between common law and civil law nations, whereby in civil law nations, no significance is demonstrated except for the interaction between the reputable auditors and underwriters. In the common law nation, interactions between reputable auditors and ownership retention have an impact on IPOs’ first-day return. The research findings provide outlooks into an IPO framework for issuers, investors, and regulators. Issuers may want to weigh carefully the costs and benefits of hiring credible auditors and underwriters when going public as they act as signaling agents. As for the investors, they should take into consideration the involvement of reputable underwriters and auditors and the degree to which the IPO firms retain ownership, as the interactive effects give clear signals on firm valuation and IPOs’ first-day returns. Regulators may find the findings informative concerning the creation of a more organized regulatory and financial system that could lead to a deeper and more open financial market.

The influence of symbolic and instrumental attributes of employer image on perceived industry attractiveness: differences between business owners and employees

PurposeThis study determines the influence of employer image on industry attractiveness in small and medium-sized hospitality firms by using the instrumental-symbolic framework adapted from marketing literature.Design/methodology/approachA total of 405 employees and 429 family firm owners in Bavaria were surveyed using a quantitative research design. The authors used linear and hierarchical multiple regression analyses for hypothesis testing using the variables included in the instrumental-symbolic employer image framework.FindingsThe study revealed differences in perception between employees and owners. Data showed that employees' ratings for instrumental attributes, such as job security and income options, and symbolic attributes, such as industry attractiveness, significantly differ from those of owners. Consistent with the instrumental-symbolic framework, owners' perceptions of symbolic attributes predicted their perceived industry attractiveness.Practical implicationsOwners may examine how their industry's image needs to be changed to gain positive perception by current and potential employees. Policymakers may benefit from the study’s results that may help them find the right focal points for strategies in promoting Bavaria's hospitality sector. As a result, an adequate and positive image is created that attracts workers for this sector.Originality/valueThe study addresses the rather under-researched stakeholder group of existing hospitality employees, particularly with respect to employer image. Furthermore, owners and employees are compared, regardless of their individually different relationships to the business. Employer image is connected with overall perceived industry attractiveness, stating that the industry comprises individual employing businesses and thus depends on employer image.

Financing woes: estimating the impact of MSME financing gap on financial structure practices of firm owners

PurposeAccessing formal mainstream finance is a cumbersome process for Micro, Small and Medium Enterprises (MSMEs) of emerging economies. Empirical investigations have connected finance accessibility to financing gap that restricts MSMEs from borrowing through formal channels. The purpose of this study is to explore the influence of financing gap on firms' financial structure (FS) practices. In this regard, the research framework divides financing gap into four dimensions, namely: demand gap (DG), supply gap (SG), knowledge gap (KG) and empathy gap (EG).Design/methodology/approachThe paper adopts a quantitative approach to establish the underlying relationship between the variables. The participants of the self-structured questionnaire survey were 219 MSME owners from manufacturing, trading and service industries. The results are inferred through the partial least squares structural equation modeling (SEM) technique.FindingsThe findings recognise a significant impact of financing gap on the FS practices of firm owners. The financing constraints contributing to KG, SG and EG are found to be extending the unwillingness of firm owners to borrow through formal channels. Further, the results also confirm the influence of financing gap on the pecking order framework (POF) of MSMEs' FS.Practical implicationsThe study offers the perspective and hesitance of MSME owners towards mainstream financing. The key findings are useful for the financial intermediaries and policymakers, who need to be sensitive and proactive in their small business lending process.Originality/valueThe study adds to the limited evidence of various dimensions of financing gap. It also addresses the role of financing gap on the conscious preferences of MSME owners towards the informal source of financing along with the POF.

The role of dyadic interactions between CEOs, chairs and owners in family firm governance

The objective of this case-based study is to understand how the dyadic interaction between the key governance actors can influence the decision-making aimed at directing and controlling a family firm. The study provides evidence that dyadic interaction at the back stage of the formal governance process can offer a privileged position for the family firm owners who serve on the board, and the non-family member Chair of the Board, to influence decision-making before, after and between board meetings. The cases studied suggest that dyadic interactions can serve as preparation for formal board processes and complement and clarify them, yet they also have the potential to conflict with them. Dyadic interaction is also shown to offer important relational and emotional benefits that may not necessarily be achieved through larger group interaction. The findings suggest that although the actors can self-regulate their behaviour through informal rules, the rules may imperfectly address one risk of dyadic interaction—the reduced cognitive conflict among the board.

Entrepreneurial exit by acquisition: the impact of heterogeneity in products and technology portfolio and marketing capabilities

Purpose This paper aims to study the effect of two important marketing decisions on the extent of value capturing by the firm owners. First, it addresses the debate whether acquirers of young technology-based firms value targets that span multiple technology and market categories indicating multiples options for growth or prefer more narrowly defined targets with a clear product and market focus. Second, it investigates to what extent the use of alliances for marketing purposes contributes to value capturing and how they moderate the effect of diversification of technology and marketing. Design/methodology/approach To estimate the acquisition price, a linear regression model is used, including a Heckman correction controlling for the likelihood of being acquired. The hypotheses are tested in a sample of British venture capital backed firms. Findings Firms that convey focus in their marketing activities (either because they focus on a few market categories or because they rely on downstream alliance to market their inventions) receive higher valuations at acquisition than those that diversify. Further, also the size of the product portfolio is negatively correlated to the acquisition price. Finally, the results reveal that firms with a broad patent portfolio can reduce the negative effects on firm value by engaging in less downstream alliances. Originality/value This paper advances existing research on exit strategies for entrepreneurial firms by considering factors explaining acquisition prices, instead of acquisition probabilities. Further, it adds the categorization research by demonstrating how acquirers respond to complex combinations of technology and market categories.