Family firm heterogeneity on CSR approach: A socio-emotional (SEW) perspective

How family firms adopt a certain corporate social responsibility (CSR) approach remains a relatively unexplored matter in family firm and firm ethics research. Hence, we study how and why the CSR approach (broad vs. narrow; benefits vs. costs) differs within family firms, addressing the influence of the socio-emotional wealth (SEW) dimensions, individually or combined. We used empirical evidence gathered through 13 case studies of firms from the Andalusia region and we used the interpretative approach of the grounded theory based on case study data. Results of our analyses lead to propose that family firms with a higher identification and more positive than negative valence with regard to emotional attachment and family enrichment dimensions will be more likely to exhibit a broad approach of CSR. Likewise, those family firms adopting CSR actions with stakeholders due to instrumental use of image and reputation dimension will more probably display a benefits approach. JEL CLASSIFICATION: L26; M14

Unemployment and its scarring effect on wages in Germany: evidence from linked employer-employee data

PurposeAssess and compare scarring effects of unemployment in Germany to other countries and to consider firm heterogeneity.Design/methodology/approachThe author uses linked employer-employee data to analyze the effect of unemployment and its duration on future wages in Germany. Using administrative data on workers and firms in Germany and considering registered and unregistered unemployment episodes, the results show long-lasting wage losses caused by unemployment incidences. Furthermore, the estimations indicate that unemployment duration as well as selectivity into firms paying lower wages is of particular relevance for the explanation of wage penalties of re-employed workers.FindingsUnemployment causes massive and persistent wage declines in the future, which depend on the unemployment duration. Furthermore, reduced options of unemployed workers and selectivity in firms contribute to a large part of unemployment scarring.Practical implicationsFindings are relevant for current debates on unemployment and can help design measures to avoid huge costs of unemployment.Originality/valueThis paper analyses long-term unemployment scarring by considering not only unemployment duration but also selectivity in firms and its effect on the scarring effect.

The usefulness of extended input–output tables incorporating firm heterogeneity

This study examines the usefulness of an extended input–output table (EIOT) incorporating the heterogeneity of Japanese firms based on differences in ratios of imported intermediate goods to total output. Using an EIOT, the vertical specialization indicator of Japan was calculated, which corresponds to the foreign value added included in exports. In this process, differences in intermediate input ratios were measured examining different types of firms using firm-level microdata from the Basic Survey of Japanese Business Structure and Activities. The results indicate that distinguishing between exporting and non-exporting firms is relevant for assembly industries such as electronics and automobiles, as widely discussed in the literature. In contrast, for primary materials industries, such as paper, chemical, and metal industries, other distinctions appear to be more relevant. For example, for the chemical industry, wherein firms tend to have large, integrated manufacturing plants, the differences in intermediate import ratios are largest when distinguishing large firms from small and medium firms. For paper and metal industries, which rely on foreign raw materials, the difference is largest when distinguishing between firms with and without foreign affiliates. By incorporating such heterogeneity, the vertical specification indicator increases by 70%; thus, the EIOT captures the foreign value added more comprehensively.

Organizational Psychological Capital in Family Firms: the Role of Family Firm Heterogeneity

Organizational psychological capital—comprising hope, confidence, resilience, and optimism—is a vital resource for family firms in times of stress. Surprisingly, whether and how family firm idiosyncrasies impact organizational psychological capital remains unclear. Considering the theoretical paradigm of socio-emotional wealth, we investigate two important family firm characteristics as antecedents of organizational psychological capital: the family involvement in the top management team and the generation of the family firm. We further propose that these relationships are moderated by a board of directors’ tenure. Based on an empirical analysis of listed U.S. family firms, our results confirm a negative relationship between family membership in the top management team and organizational psychological capital. In addition, we find that descendant family firms exhibit higher levels of organizational psychological capital than founder family firms. The results also confirm the moderating role of board tenure. This study works toward a more holistic view of family firm heterogeneity and specifically how different types of family involvement shape a firm’s positive strategic resources.

CEO pay and family firm heterogeneity: A behavioral agency model perspective

We study the effects of family control on CEO pay from the perspective of behavioral agency model (BAM), with particular focus on family firm’s generational stage and CEO family ties. Using a panel of Australian listed firms, we find that family firms present lower total and variable CEO pay, showing also less pay disparity between the CEO and other top executives. We also find that multi-generational family firms and those run by non-family CEOs offer higher total and variable CEO pay and present high pay disparity. The BAM and family’s aversion to socioemotional wealth loss can explain the effects of family control based on the pursuing of non-financial family goals. The decline of these goals derived from the aging of the firm and the hiring of external CEOs shape family control and should be considered in the design of executive compensation policies and by external parties when assessing their suitability. JEL CLASSIFICATION: G30; G32; G34; G38