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1
Neffe, Carolin, Celeste P. M. Wilderom, and Frank Lattuch. "Leader behaviours of family and non-family executives in family firms." Management Research Review 43, no. 7 (January 22, 2020): 885–907. http://dx.doi.org/10.1108/mrr-12-2018-0468.
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Purpose Several studies of family firm failures have pointed to non-family members in leading positions as a reason. However, non-family members have often played a key role in family-firm longevity, while non-family executives’ involvement in family firms is increasing. These non-family executives who (co-)run family firms are thought to require an almost impossible set of behavioural qualities. The aim of this exploratory study is to find out how specific leader behaviours of effective family executives and non-family executives may differ. Design/methodology/approach Based on Dulewicz and Higgs’ (2005) broad leadership frame, the authors draw attention to a large range of behaviours of family-firm executives. In-depth interviews were conducted with successful German executives, both family and non-family ones. Their answers had to contain specific behavioural examples. Findings More behavioural similarities than differences are shown between family- and non-family-based executives. Yet, the self-reflective communicative behavioural qualities of the non-family executives could balance a lack of such qualities among the family-based executives. Based on the three major differences – decision-making style, communication versatility and self-awareness – specific new research propositions are distilled about effective family firm leadership. Originality/value Practical suggestions for recruiting non-family executives are offered. Future quantitative longitudinal research on how to pair specific behavioural qualities of family and non-family based executives that optimise family-firm longevity is urgently needed.
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Ntoung, Lious Agbor Tabot, Helena Maria Santos de Oliveira, Benjamim Manuel Ferreira de Sousa, Liliana Marques Pimentel, and Susana Adelina Moreira Carvalho Bastos. "Are Family Firms Financially Healthier Than Non-Family Firm?" Journal of Risk and Financial Management 13, no. 1 (December 29, 2019): 5. http://dx.doi.org/10.3390/jrfm13010005.
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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.
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Kang, Hyung Cheol, and Jaemin Kim. "Why do family firms switch between family CEOs and non-family professional CEO?" Review of Accounting and Finance 15, no. 1 (February 8, 2016): 45–64. http://dx.doi.org/10.1108/raf-03-2015-0032.
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Purpose – This study aims to examine whether a switching decision between a family CEO and a non-family professional CEO has a different effect on firm performance and what determines such a decision by family firms. Design/methodology/approach – This study uses multiple regressions, Probit and univariate analyses, based the sample of family-controlled Chaebol firms in Korea for the 11-year period from 2001 to 2011. Findings – Evidence found was consistent with the family entrenchment hypothesis: firms experiencing declining Q value are more likely to replace family CEOs with non-family CEOs, and that these firms, having switched to non-family CEOs, exhibit an improvement in firm performance as measured by the change in Q value. On the other hand, for those firms that replace non-family CEOs with family member CEOs, no evidence was found that the switching decision either decreases or increases firm performance. The results of Probit and univariate analyses suggest that firms switching to family CEOs tend to be larger, stock-exchange listed and more “central”, with more cash flow rights held by the controlling families and with relatively more equity holdings in the other affiliated firms of the same Chaebol group. In contrast, firms switching to non-family CEOs tend to be smaller, unlisted and less “central”, with less equity holdings in the other affiliated firms of the same Chaebol group. Originality/value – This study sheds light on the different value implications and determinants of a decision between “family CEO” and “non-family CEO”.
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Navarro, María Sacristán, and Silvia Gómez Ansón. "Do families shape corporate governance structures?" Journal of Management & Organization 15, no. 3 (July 2009): 327–45. http://dx.doi.org/10.1017/s1833367200002650.
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AbstractThis paper provides empirical evidence of family firm corporate governance structures, by examining a set of corporate governance characteristics of 132 non-financial Spanish listed firms. Results show that family firm boards present differential characteristics and that different patterns of family ownership configurations do not affect family firm corporate governance structures. We find that Spanish family firm boards are smaller than those in non-family firms. Family firm directors own a larger fraction of firm shares and have longer Chairman tenure than non-family firms, and family firms use fewer voluntary board committees – such as nomination and remuneration committees and executive committees. Besides, family firm boards and committees are biased towards insiders. Whether these differential characteristics affect other minority non-family shareholders negatively remains an open question.
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Navarro, María Sacristán, and Silvia Gómez Ansón. "Do families shape corporate governance structures?" Journal of Management & Organization 15, no. 3 (July 2009): 327–45. http://dx.doi.org/10.5172/jmo.2009.15.3.327.
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AbstractThis paper provides empirical evidence of family firm corporate governance structures, by examining a set of corporate governance characteristics of 132 non-financial Spanish listed firms. Results show that family firm boards present differential characteristics and that different patterns of family ownership configurations do not affect family firm corporate governance structures. We find that Spanish family firm boards are smaller than those in non-family firms. Family firm directors own a larger fraction of firm shares and have longer Chairman tenure than non-family firms, and family firms use fewer voluntary board committees – such as nomination and remuneration committees and executive committees. Besides, family firm boards and committees are biased towards insiders. Whether these differential characteristics affect other minority non-family shareholders negatively remains an open question.
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F. Simões Vieira, Elisabete. "The effect on the performance of listed family and non-family firms." Managerial Finance 40, no. 3 (March 4, 2014): 234–53. http://dx.doi.org/10.1108/mf-06-2013-0134.
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Purpose – The purpose of this paper is to examine whether the ownership of public firms is related to accounting and market performance, comparing family and non-family listed firms. Design/methodology/approach – The paper uses regression analysis, considering a sample of Portuguese family and non-family firms (NFF) for the period between 1999 and 2010. Findings – Overall, the results show that family firms (FF) are older, are more indebted and have higher debt costs than NFF. However, they present lower levels of risk. The evidence suggests that FF outperform NFF when the author considers a market performance measure. The market performance of family-controlled firms is more sensitive to the crisis periods and age, compared to their counterparts. The empirical findings suggest that under economic adversity, the performance is especially compromised by the firms' age. Research limitations/implications – A limitation of this study is the small size of the sample, which derives from the small size of the Portuguese stock market, the Euronext Lisbon. Originality/value – This paper offers some insights on the ownership of public firms and firm performance by investigating a small European economy. The study also contributes to the stream of firm performance, considering new independent variables as determinants of firm performance, such as operational risk. Finally, the study examines the interaction between ownership and performance under both steady and adverse economic conditions, giving the opportunity to analyze whether firm performance differs according to market conditions.
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Garcés-Galdeano, Lucia, and Carmen García-Olaverri. "How important is family involvement for small companies’ growth?" Journal of Small Business and Enterprise Development 27, no. 4 (May 28, 2020): 531–54. http://dx.doi.org/10.1108/jsbed-06-2019-0190.
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PurposeOur paper seeks to further understand how family involvement in management influences firm growth.Design/methodology/approachUsing a sample of small high-tech firms, we classify three different types of firms: family firms managed by family-CEOs, family firms managed by non-family CEOs and non-family firms.FindingsConsistent with our expectations, we show that firms managed by family-CEOs have less firm growth in comparison with the other two groups. When the family firm is managed by non-family CEOs, the presence of another family member in management positions has a negative impact on firm growth. Finally, we found that founder-led family firms have better firm growth than descendant-led family firms.Research limitations/implicationsImplications for the theory of family firms are discussed.Originality/valueThe value of the present study is to analyse in depth the heterogeneity of the family business trying to close the gap by exploring the effect of family involvement on small firm growth. Thus, we will find different behaviours of these family companies, depending on the family member’s presence in management positions.
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Huang, Xuan, and Fei Kang. "Are family firms more optimistic than non-family firms?" Accounting Research Journal 32, no. 3 (September 27, 2019): 399–416. http://dx.doi.org/10.1108/arj-07-2017-0111.
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Purpose The purpose of this study is to investigate how family ownership affects the disclosure tone of firm earnings press releases. Design/methodology/approach Following prior literature, this study defines family firms as those in which members of the founding families continue to hold positions in top management, to sit on the board or to be blockholders. The disclosure tone of earnings press releases is measured by the level of optimism in firms’ earnings announcements using Loughran and McDonald’s (2011) word classifications. Multivariate analysis is performed to examine the impact of family ownership on firms’ disclosure tone. Additional analysis includes controlling for different firm-level characteristics and using alternative measures of disclosure tone. Findings This study documents that the disclosure tone of earnings announcements is more optimistic for family firms than for non-family firms. The result implies that family owners’ large undiversified equity position in their business results in strong incentives for them to issue more positive earnings announcements to maintain high stock performance. Further analysis reveals that the results are mainly driven by family firms with founder CEOs. The results are robust to controls for corporate governance characteristics and to alternative measures of corporate disclosure tone. Originality/value The findings of this study contribute to the literature that examines factors associated with the determinants of the tone in firms’ earnings announcements. In addition, this study adds to the extant literature on family firms by providing useful insight into the influence of family control on corporate voluntary disclosure.
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Biswas, Pallab K., Helen Roberts, and Rosalind H. Whiting. "The impact of family vs non-family governance contingencies on CSR reporting in Bangladesh." Management Decision 57, no. 10 (November 11, 2019): 2758–81. http://dx.doi.org/10.1108/md-11-2017-1072.
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Purpose Based on the socioemotional wealth (SEW) perspective and agency theory, the purpose of this paper is to examine how the introduction of the 2006 Corporate Governance (CG) Guidelines and family governance affected the level of the corporate social responsibility (CSR) reporting of non-financial companies in Bangladesh. Design/methodology/approach The authors use multivariate regression to analyse 2,637 firm-level annual observations, from 1996 to 2011 annual reports of Bangladeshi publicly listed non-financial-sector companies, to investigate how firm-level CG quality affects CSR disclosure in family and non-family firms. Findings CG quality significantly increases the level of CSR disclosure and this relationship is stronger prior to the new CG Guidelines. Family firms’ CSR reporting levels are significantly lower than non-family firms’, and this effect is stronger after the change in the CG Guidelines. CEO duality, the presence of an audit committee and profitability improve family-firm CSR reporting in Bangladesh, while non-family CSR disclosures are positively associated with board size and firm competition. Board independence is not related to CSR disclosure. Originality/value The authors provide evidence of the benefit of the CG Guidelines’ introduction on company CSR disclosure in an emerging economy and the importance of specific governance mechanisms that differentiate family and non-family-firm CSR disclosures in Bangladesh using a SEW framework.
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Nikolov, Atanas Nik, and Yuan Wen. "Does family involvement matter post IPO? Adding value through advertising in family firms." Journal of Family Business Management 8, no. 3 (October 8, 2018): 218–34. http://dx.doi.org/10.1108/jfbm-01-2018-0002.
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PurposeThis paper brings together research on advertising, family business, and the resource-based view (RBV) of the firm to examine performance differences between publicly traded US family vs non-family firms. The purpose of this paper is to understand the heterogeneity of family vs non-family firm advertising after such firms become publicly traded.Design/methodology/approachThe authors draw on the RBV of the firm, as well as on extensive empirical literature in family business and advertising research to empirically examine the differences between family and non-family firms in terms of performance.FindingsUsing panel data from over 2,000 companies across ten years, this research demonstrates that family businesses have higher advertising intensity than competitors, and achieve higher performance returns on their advertising investments, relative to non-family competitors. The results suggest that the “familiness” of public family firms is an intangible resource that, when combined with their advertising investments, affords family businesses a relative advantage compared to non-family businesses.Research limitations/implicationsFamily involvement in publicly traded firms may contribute toward a richer resource endowment and result in creating synergistic effects between firm “familiness” and the public status of the firm. The paper contributes toward the RBV of the firm and the advertising literature. Limitations include the lack of qualitative data to ground the findings and potential moderating effects.Practical implicationsUnderstanding how family firms’ advertising spending influences their consequent performance provides new information to family firms’ owners and management, as well as investors. The authors suggest that the “familiness” of public family firms may provide a significant advantage over their non-family-owned competitors.Social implicationsThe implications for society include that the family firm as an organizational form does not need to be relegated to a second-class citizen status in the business world: indeed, combining family firms’ characteristics within a publicly traded platform may provide firm performance benefits which benefit the founding family and other stakeholders.Originality/valueThis study contributes by highlighting the important influence of family involvement on advertising investment in the public family firm, a topic which has received limited attention. Second, it also integrates public ownership in family firms with the family involvement–advertising–firm performance relationship. As such, it uncovers a new pathway through which the family effect is leveraged to increase firm performance. Third, this study also contributes to the advertising and resource building literatures by identifying advertising as an additional resource which magnifies the impact of the bundle of resources available to the public family firm. Fourth, the use of an extensive panel data set allows for a more complex empirical investigation of the inherently dynamic relationships in the data and thus provides a contribution to the empirical stream of research in family business.
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Meah, Mohammad Rajon, Kanon Kumar Sen, and Md Hossain Ali. "Audit Characteristics, Gender Diversity and Firm Performance: Evidence from a Developing Economy." Indian Journal of Corporate Governance 14, no. 1 (May 26, 2021): 48–70. http://dx.doi.org/10.1177/09746862211007244.
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This study aims to explore the impact of audit characteristics and gender diversity on firm performance across family and non-family firms in Bangladesh. Using data of 61 non-family and 48 family firms from 2013 to 2019, this study applies system generalised method of moments approach to carry out regression analysis. Next, the consistency of results is detected by a full sample interaction analysis. In case of non-family firm, this study documents that Big4 audit firms (Big4) and female directors on board (FDR) have significant positive impact on firm performance. Conversely, audit meeting frequency (AMF) contributes negatively to the firm performance. Unfortunately, audit committee size (ACS) and audit committee independence (ACI) have no significant contribution on firm performance. In case of family firms, this study finds that ACS and ACI have significant negative impact on firm performance. Besides, Big4, AMF and FDR have no significant contribution on firm performance. It reflects that corporate governance mechanisms in family firm are not working well and even to some extent detrimental to the firm performance. It, ultimately, demands for reforms in corporate governance framework and incorporating new dimensions for family firms.
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Badrul Muttakin, Mohammad, Arifur Khan, and Nava Subramaniam. "Family firms, family generation and performance: evidence from an emerging economy." Journal of Accounting in Emerging Economies 4, no. 2 (July 1, 2014): 197–219. http://dx.doi.org/10.1108/jaee-02-2012-0010.
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Purpose – The purpose of this paper is to examine the impact of family ownership on firm performance. In particular the authors investigate whether family firms outperform non-family firms and whether first generation family firms perform better than second generation family firms in an emerging economy using Bangladesh as a case. Design/methodology/approach – This study uses a data set of 141 listed Bangladeshi non-financial companies for the period 2005-2009. The methodology is based on multivariate regression analysis. Findings – The result shows that family firms perform better than their non-family counterparts. The authors also find that family ownership has a positive impact on firm performance. The analysis further reveals intergenerational differences where family firms and performance are associated positively only when founder members act as CEOs or chairmen. However, when descendents serve as CEOs or chairmen family firms are associated with poorer firm performance. Originality/value – The authors extend the findings of previous studies that investigate the family ownership and firm performance relationship in developed economy settings, but neglected emerging economies. The study also informs the literature about the intergenerational impact of family firms on performance in an emerging market.
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Gerulaitiene, Neringa, Asta Pundziene, and Egle Vaiciukynaite. "The hidden role of owners' spouses in family firm innovativeness: a dynamic managerial capabilities perspective." Baltic Journal of Management 15, no. 5 (July 22, 2020): 707–26. http://dx.doi.org/10.1108/bjm-01-2020-0021.
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PurposeThe purpose of this paper is to investigate the effect of the dynamic managerial capabilities (DMC) of the spouse (either working or non-working) of a family firm owner on firm innovativeness. This paper assesses the role of three elements of the DMC of owners' spouses (emotion regulation, conflict resolution and networking capabilities) that are bridged by familiness on family firm innovativeness.Design/methodology/approachThis paper presents the results of a multiple case study. Twelve cases were selected: six innovative and six non-innovative family firms in Lithuania. The study design enabled a comparison not only of innovative and non-innovative family firms but also of non-working and working spouses of family firm owners.FindingsThe findings show that family firm owners' spouses contribute to firm innovativeness through their DMC in terms of emotion regulation, conflict resolution and networking capabilities.Research limitations/implicationsThis research focused on a sample of firms in Lithuania. Future studies should broaden the research to other countries.Originality/valueThis research provides empirical evidence of the hidden role of the DMC of family firm owners' spouses and their contribution to firm innovativeness. This paper extends the application of DMC to family business research.
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Maseda, Amaia, Txomin Iturralde, Gloria Aparicio, Lotfi Boulkeroua, and Sarah Cooper. "Family board ownership, generational involvement and performance in family SMEs." European Journal of Management and Business Economics 28, no. 3 (October 7, 2019): 285–300. http://dx.doi.org/10.1108/ejmbe-07-2018-0071.
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Purpose In order to deepen our knowledge of governance of family firms, the purpose of this paper is to focus our attention on the relation between family owners who are members of the board of directors and firm performance. Also, this study sheds more light on how the generation in charge of the family firm affects that relationship, as generational involvement may be a unique predictor of governance behavior in these firms. Design/methodology/approach The authors applied a cross-sectional ordinary least squares regression model to test the hypotheses on a sample of 313 non-listed Spanish family SMEs. The authors suggest the possibility of a non-linear relationship between the percentage of ownership by family members of the board of directors and firm performance, and specifically, the authors propose an S-shaped effect that implies two breakpoints. Findings The authors find not only that an inverted U-shaped relationship exists, but also an S-shaped relationship between family board members’ ownership and firm performance in family SMEs. Nevertheless, the results are different in comparing first-, second- and later-generation family firms. Originality/value This is one of the few empirical studies that examine the relationship between family board ownership and firm performance in the context of non-listed family SMEs. The authors consider that the influences of family directors on the board of directors as well as the concentration of family ownership on the board of directors are worth studying in non-listed family SMEs. Moreover, previous studies have focused mainly on large listed family firms but not on unlisted ones.
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Bjuggren, Per-Olof, Louise Nordström, and Johanna Palmberg. "Are female leaders more efficient in family firms than in non-family firms?" Corporate Governance: The International Journal of Business in Society 18, no. 2 (April 3, 2018): 185–205. http://dx.doi.org/10.1108/cg-01-2017-0017.
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Purpose The aim of this study is to investigate whether female leaders are more efficient in family firms than in non-family firms. Design/methodology/approach This paper uses a unique database of ownership and leadership in private Swedish firms that makes it possible to analyze differences in firm performance due to female leadership in family and non-family firms. The analysis is based on survey data merged with micro-level data on Swedish firms. Only firms with five or more employees are included in the analysis. The sample contains more than 1,000 firms. Findings The descriptive statistics show that there are many more male than female corporate leaders. However, the regression analysis indicates that female leadership has a much more positive impact on the performance of family firms than on that for non-family firms, where the effect is ambiguous. Originality/value Comparative studies examining the impact of female leadership on firm-level performance in family and non-family firms are rare, and those that exist are most often either qualitative or focused on large, listed firms. By investigating the role of female directors in family and non-family firms, the study adds to the literature on management, corporate governance and family firms.
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Westhead, Paul, and Marc Cowling. "Family Firm Research: The Need for a Methodological Rethink." Entrepreneurship Theory and Practice 23, no. 1 (October 1998): 31–56. http://dx.doi.org/10.1177/104225879802300102.
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The scale of family company activity in the United Kingdom was measured with regard to several family firm definitions. This study confirms that family companies are a numerically important group of businesses. Policy makers and practitioners must, however, be aware that the scale of family firm activity in any developed economy is highly sensitive to the family firm definition selected. Within a bivariate as well as multivariate statistical framework, marked demographic differences were identified between family and non-family companies with regard to several family firm definitions. We suggest that bivariate studies comparing the management practices and performance of family and non-family firms may have identified ‘demographic sample’ differences rather than ‘real’ differences. Implications for future research exploring the management and performance of family and non-family firms are discussed.
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Bambang, Margareta, and Marko S. Hermawan. "FOUNDING FAMILY OWNERSHIP AND FIRM PERFORMANCE: EMPIRICAL EVIDENCE FROM CONSUMER GOODS INDUSTRY IN INDONESIA." Journal of Applied Finance & Accounting 4, no. 2 (June 30, 2012): 112–31. http://dx.doi.org/10.21512/jafa.v4i2.284.
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This research investigates the significant influence of family ownership on firm performance in order to provide information to decision makers and other interested parties. The analysis includes comparisons between family and non-family firm performance in Indonesia. The samples are taken from 31 consumer goods companies, listed on the Indonesian Stock Exchange, ranging from 2005 to 2009. The results show that non-family firms perform better than family firms and no significant influence between family ownership and firms’ profitability. On the other hand, family ownership has negative contribution to firm market valuation. The study suggests that family firms have lower financial performance than that of non-family. Family members within the top position have major control rights and contribute a negative influence to firm performance. The evidence raises concerns about possible profit manipulation and weak governance law in Indonesia, and as a result there is an expropriation of wealth to the majority and family related shareholders.
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Kalyanaraman, Lakshmi. "Do family CEOs impact firm value? An empirical analysis of Indian family firms." Corporate Board role duties and composition 11, no. 1 (2016): 59–70. http://dx.doi.org/10.22495/cbv11i1art6.
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We study the association between family CEO and firm value on a sample of 288 family firms during the 6-year period, from 2009 to 2014. The sample is drawn from domestic private companies belonging to non-financial services sector included in the NSE CNX 500 index. We find that family CEO has no significant association with firm value, when the family is not the majority shareholder. Family shareholding has positive relationship with firm value, but does not moderate the relationship of family CEO with firm value. We show that family CEO and firm value are negatively related when the family does not hold majority equity stake in the family firm. While family shareholding has no significant relationship with firm value, it has a negative interaction effect on the relationship between family CEO and firm value. The research findings have important implications for family firms as well as the nonfamily investors in the family firms.
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Yopie, Santi, and Chrislin Chrislin. "Analisis Pengaruh Keterlibatan Keluarga terhadap Kinerja Perusahaan di Indonesia." Owner 6, no. 1 (January 1, 2022): 359–68. http://dx.doi.org/10.33395/owner.v6i1.593.
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Family businesses have steadily dominated the economy sector in recent decades. A number of scholars have focused on the link between management by family members and firm performance. However, the findings are not conclusive and vary. As a result, a re-examination is necessary. The goal of this research is to determine the possible influences caused by family presence, non-family shareholders, professional president directors, and founder-managed firms on firm performance, as well as the link between family presence and firm performance when family firm reputation is taken into the account. Firm performance was valued by measuring return on asset and equity, sales growth, and tobin’s q. This study examined 600 samples consisting 120 family firms in manufacturing and service sectors on Indonesia’s Stock Exchange beginning with the year 2016 – 2020. To make data analysis more straightforward, panel regression research (time series and cross-sectional data) was conducted utilizing PLS 3.0 software. The study results prove family presence, professional president directors, and founder-managed firms have positive impact on firm performance. Meanwhile, non-family shareholders showed negative impact towards firm performance. Furthermore, the findings of this study also show the favorable impact of family presence on firm performance may be bolstered by family firm reputation.
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Setia-Atmaja, Lukas, and Yane Chandera. "Impact of family ownership, management, and generations on IPO underpricing and long-run performance." Investment Management and Financial Innovations 18, no. 4 (December 1, 2021): 266–79. http://dx.doi.org/10.21511/imfi.18(4).2021.23.
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This paper examines the impact of family ownership, management, and generations on IPO underpricing and the long-run performance of publicly listed firms in Indonesia from 2004 to 2015. This study is based on agency theory, which discusses the relationship between shareholders and management, as well as controlling and non-controlling shareholders. Study results show that IPO underpricing was 28% higher for family firms than non-family firms. Among family firms, a family member’s presence as a Chief Executive Officer (CEO) significantly reduced the level of IPO underpricing. A negative relationship between family CEO and IPO underpricing was only observed if a CEO at the time of IPO was the founder instead of family descendants. A long-run return of family-firm IPOs was more likely to underperform their non-family-firm counterparts. The findings in the primary market suggest that investors predict bigger issues of agency conflicts between controlling and non-controlling shareholders in family firms than the issues of agency conflicts between shareholders and management in non-family firms. Since investors consider family-firm IPOs to be riskier than non-family firms, they demand a higher level of IPO underpricing to compensate for such risks. The results in the secondary market confirm the findings in the primary market.
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Ibrahim, H., and F. A. Samad. "Agency costs, corporate governance mechanisms and performance of public listed family firms in Malaysia." South African Journal of Business Management 42, no. 3 (September 30, 2011): 17–26. http://dx.doi.org/10.4102/sajbm.v42i3.496.
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We compare corporate governance and performance between family and non-family ownership of public listed companies in Malaysia from 1999 through 2005 measured by Tobin’s Q and ROA. We also examine the governance mechanisms as a tool in monitoring agency costs based on asset utilization ratio and expense ratio as proxy for agency costs. We find that on average firm value is lower in family firms than non-family firms, while board size, independent director and duality have a significant impact on firm performance in family firms as compared to non-family firms. We also find that these governance mechanisms have significant impact on agency costs for both family and non-family firms.
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Khan, Muhammad Nauman, and Fawad Khan. "DOES OWNERSHIP MATTER? A STUDY OF FAMILY AND NON FAMILY FIRMS IN PAKISTAN." Problems of Management in the 21st Century 2, no. 1 (December 5, 2011): 95–109. http://dx.doi.org/10.33225/pmc/11.02.95.
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Researchers have been trying to find out whether ownership makes any difference to a firm’s performance. The purpose of this article is to analyse whether family or non-family firms perform better. It focuses on comparison only and does not indulge in finding out reasons of the results. A sample of 100 randomly selected firms from Karachi Stock Exchange (KSE), Pakistan were examined for six years (2004-2009). Ownership variable is taken as a dummy variable besides two other independent variables: age and size. Return on Asset (ROA), Return on Equity (ROE) and Tobin’s Q are used to measure firm performance. Fixed Effect Model along with statistical analysis were used to examine the effects of the variables. The statistical analysis showed that non-family firms had greater mean values for performance variables. Correlation matrix showed that the size of a firm will be small in case a family is running it. The correlation coefficient between family ownership and age is also negative. Family ownership had a negative β in every regression. Log of asset and log of age had positive βs in every model. The results thus obtained from empirical data of firms listed on KSE clearly reflect that non-family firms outperform family firms with every performance variable included in the study. This can serve as a guideline in determinig ownership structure for firms in Pakistan. Key words: family and non family firms, Karachi Stock Exchange (KSE), ownership structure, performance of firms.
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Avrichir, Ilan, Raquel Meneses, and Agnaldo Antonio dos Santos. "Do family-managed and non-family-managed firms internationalize differently?" Journal of Family Business Management 6, no. 3 (October 10, 2016): 330–49. http://dx.doi.org/10.1108/jfbm-02-2015-0014.
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Purpose Although the concepts of family business, internationalization, and agency theory have received some attention in the relevant literature, these concepts and theories have been used independently. The purpose of this paper is to help close the gap between what is known and what needs to be known about the decision-making processes of internationalization of family managers (FM) and non-family managers (NFMs). Design/methodology/approach The paper analyzes the story of Busscar, a Brazilian firm that began internationalization under an FM and ended it under an NFM. The management transition took place suddenly, as the family CEO died in a tragic accident, and the company appointed an NFM to replace him virtually overnight. These circumstances, as well as the fact that Busscar accelerated its internationalization process after the transition only to go bankrupt a few years later makes this case critical. Findings The paper concludes that under NFMs, the speed and scope of the firm internationalization processes were accelerated and the financial risks were augmented, which is in line with the agency theory hypothesis and contradicts suggestions that NFMs tend to be more structured. Research limitations/implications Many researchers argue that it is important to professionalize the management of family firms. It is expected that an NFM leads to a more structured strategy. The study shows otherwise; changing the manager leads to opportunistic internationalization using emerging strategies rather than deliberate ones. Originality/value This study suggests that firms, networks, entrepreneurship, and ownership are not the only important variables. Manager origin (inside or outside the family) can change everything.
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Ang Bao. "Family Firms, Social Responsibility, and Non-Family Member Employees Identification." Think India 16, no. 3 (November 15, 2013): 10–19. http://dx.doi.org/10.26643/think-india.v16i3.7816.
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The objective of this paper is to find the relationship between family firms’ CSR engagement and their non-family member employees’ organisational identification. Drawing upon the existing literature on social identity theory, corporate social responsibility and family firms, the author proposes that family firms engage actively in CSR programs in a balanced manner to increase non-family member employees’ organisational identification. The findings of the research suggest that by developing and implementing balanced CSR programs, and actively getting engaged in CSR activities, family firms may help their non-family member employees better identify themselves with the firms. The article points out that due to unbalanced CSR resource allocation, family firms face the problem of inefficient CSR program implementation, and are suggested to switch alternatively to an improved scheme. Family firms may be advised to take corresponding steps to select right employees, communicate better with non-family member employees, use resources better and handle firms’ succession problems efficiently. The paper extends employees’ identification and CSR research into the family firm research domain and points out some drawbacks in family firms’ CSR resource allocation while formerly were seldom noticed.
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Brustbauer, Johannes K., and Mike Peters. "Risk perception of family and non-family firm managers." International Journal of Entrepreneurship and Small Business 20, no. 1 (2013): 96. http://dx.doi.org/10.1504/ijesb.2013.055695.
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Yoo, Jungmin, Sooin Kim, and Daehee Yoon. "Differential Corporate Opacity, Investment and Firm Performance between Family Firms and Non-Family Firms." Korean Accounting Review 43, no. 3 (June 30, 2018): 35–79. http://dx.doi.org/10.24056/kar.2018.03.003.
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Vincent Ponroy, Julia, Patrick Lê, and Camille Pradies. "In a Family Way? A model of family firm identity maintenance by non-family members." Organization Studies 40, no. 6 (April 11, 2019): 859–86. http://dx.doi.org/10.1177/0170840619836707.
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Focusing on the case of a successful French pharmaceutical family firm – VetCo, we develop a process model of family firm identity maintenance by non-family members. Being the first family-owned pharmaceutical actor exclusively dedicated to animal health worldwide, VetCo has a strong family firm identity. The maintenance of this identity is remarkable, as VetCo experienced a withdrawal of the owning family when its founder suddenly passed away and, later on, when other family members disengaged from operations. Using grounded theory, we build a process model of identity maintenance that emphasizes meaning multiplicity. Specifically, we identify three main mechanisms of meaning preservation – passing on the family legacy, unifying the metaphorical family and modelling the family business – and two mechanisms of meaning connection – holding on and bridging. In elaborating theory on family firm identity maintenance, this study contributes to family business and organizational identity scholarships.
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Mani, Yosra, and Lassaad Lakhal. "Exploring the family effect on firm performance." International Journal of Entrepreneurial Behavior & Research 21, no. 6 (September 7, 2015): 898–917. http://dx.doi.org/10.1108/ijebr-06-2014-0100.
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Purpose – The purpose of this paper is to investigate how internal social capital – as a part of the familiness resources– affects family firm performance. The social capital theory states that internal social capital within family businesses is composed of three dimensions: the structural dimension, the relational dimension, and the cognitive dimension. The aim of the paper is to study the relationship between each dimension of internal social capital and family firm performance. Design/methodology/approach – The paper employs an empirical investigation which is based on a sample of 114 Tunisian family firms. Findings – Results demonstrate that the structural and relational dimensions are positively associated with financial and non-financial family firm’s performance. However, the cognitive dimension has a significant positive effect on financial performance but not on non-financial family firm performance. Originality/value – The proposed model aims to test the direct effect of internal social capital dimensions on financial and non-financial family firm’s performance. Besides, there is a lack of empirical evidence aiming at understanding the impact of structural, cognitive and relational social capital on the performance of family firms.
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Bhatt, R. Rathish, and Sujoy Bhattacharya. "Family firms, board structure and firm performance: evidence from top Indian firms." International Journal of Law and Management 59, no. 5 (September 11, 2017): 699–717. http://dx.doi.org/10.1108/ijlma-02-2016-0013.
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Purpose Given the prevalence of family-run businesses in India, this paper aims to empirically investigate the impact of family firms on the relationship between firm performance and board characteristics. The effectiveness of board characteristics such as independent directors, chairman independence, role duality, non-executive directors, board busyness, board size, board meetings and board attendance are studied in the Indian context. Design/methodology/approach The sample consists of top-listed firms in India for the period 2002 to 2012. Board index was constructed to capture the governance quality of the firm. The authors also study the relationship between board structure and firm performance by segregating the sample based on family management, family ownership and family representative directors. Random effects model was used for the regression analysis in the study. Findings The authors find a negative effect of board structure on firm performance in family firms compared to non-family firms. Contrary to the most Western literature, family management was not found to significantly affect firm performance as compared to that of professionally managed firms. In the subset analysis of family firms, higher proportion of family ownership and family representative directors did not show any significant impact on the firm performance. Having a higher proportion of independent directors, larger board size or an independent chairman does not appear to improve this insignificant relationship between family firms and firm performance. Also, in family firms, no significant difference in performance is noticed before and during recession period. Originality/value The study uses a self-defined corporate governance index to measure the governance parameters, specifically the board characteristics. The results documented in this study adds to the debate on the generalizability of the findings in Western governance studies in emerging markets like India with unique institutional development background.
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Wu, Kean, Susan Sorensen, and Li Sun. "Board independence and information asymmetry: family firms vs non-family firms." Asian Review of Accounting 27, no. 3 (October 18, 2019): 329–49. http://dx.doi.org/10.1108/ara-05-2018-0110.
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Purpose The purpose of this paper is to investigate the effect of independent directors in reducing firms’ information asymmetry. Moreover, the authors enrich this investigation by differentiating the effectiveness of independent directors in an intriguing comparative setting of family vs non-family firms. Family firms are used to represent an interesting environment where controlling insiders (i.e. firms’ founding families) have dominant control over corporate decisions. This study addresses the question of whether controlling-insiders dominate independent directors. Design/methodology/approach The authors manually collect firms’ founder information to identify family firm status in a sample of S&P 500 firms. Following a large literature in capital market research, the authors proxy information asymmetry by trading volume, bid-ask spread and price volatility. The authors employ multivariate regression with two-stage least square analysis, instrumental variable method, Heckman selection model and Hausman–Taylor model to address the issue of endogenous selection of board of director and family firm status. Findings The authors find a negative relation between the board independence and information asymmetry, suggesting independent directors are effective in reducing information asymmetry. Furthermore, the authors find this negative relation is stronger in family firms. These results are robust after controlling for the endogenous issues using various models. Research limitations/implications Our results suggest that independent directors in family-controlled firms are more successful in reducing information asymmetry than their counterparts in non-family firms. The authors provide direct evidence to support the existing theoretical arguments from Rediker and Seth (1995) and Anderson and Reeb (2004) that founding families and independent boards might be a powerful combination for aligning the interest of insider and diffused shareholders. The findings ease a prevalent concern that the role of independent directors might be compromised in an environment with controlling shareholders, and advocate regulations promoting board independence for various business practices. Originality/value A number of studies concentrate on the practice of corporate disclosure of firm’s performance and governance and how corporate disclosure mitigates information asymmetry (Leuz and Verrecchia, 2000; Ali et al., 2007; Chen et al., 2008). To the best of our knowledge, this study is the first to examine the impact of independent directors in reducing information asymmetry. The research adds to understanding the incentives of board members and supports recent findings that different types of investors have heterogeneous incentives for corporate disclosure (Srinidhi et al., 2014).
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Kahlert, Christoph, Isabel C. Botero, and Reinhard Prügl. "Revealing the family." Journal of Family Business Management 7, no. 1 (April 10, 2017): 21–43. http://dx.doi.org/10.1108/jfbm-10-2015-0037.
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Purpose Attracting and retaining a skilled labor force represents an important source for competitive advantage for organizations. In the European context, one of the greatest challenges that small- and medium-sized family firms face is attracting high quality non-family applicants. Researchers argue that one of the reasons for this difficulty is tied to the perception that non-family applicants have about family firms as a place to work. The purpose of this paper is to explore the perceptions that applicants have about family firms and their willingness to work in family firms in the German context. Design/methodology/approach Using principles from signaling theory, an experiment was conducted to explore the effects that information about family ownership and organizational age had on the perceptions about a firm (i.e. job security, advancement opportunities, prestige, task diversity, and compensation), and applicant’s attractiveness to it. Findings Based on the responses from 125 individuals in Germany, the authors found that explicitly communicating information about family ownership did not influence applicant perceptions about the firm or attractiveness to it. Although, information about organizational age affected perceptions of compensation, it did not affect attractiveness to the firm. Originality/value This study presents one of the first papers that focuses on the perceptions that non-family applicants have about family firms as a place to work in the European context. Thus, it provides a baseline for comparison to applicant perceptions in other European countries.
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Liew, Chee Yoong, Young Kyung Ko, Bee Lian Song, and Saraniah Murthy. "Family Firms, Directors’ Remuneration, Expropriation and Firm Value: Evidence of the Role of Independent Directors’ Tenure within the Remuneration Committee in Malaysia." Asia Proceedings of Social Sciences 2, no. 2 (December 2, 2018): 5–8. http://dx.doi.org/10.31580/apss.v2i2.243.
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This manuscript is about the influence of directors’ remuneration on firm performance and whether independent directors’ tenure in the remuneration committee moderates this relationship. The results show that within family corporations in industries which are not exclusive, non-executive directors’ remuneration have a significant negative relationship with firm performance. Family firms have a stronger significant negative relationship than non-family firms. Within family firms in non-exclusive industries, there is also a positive moderating effect of independent directors’ tenure within the remuneration committee on the influence of non-executive directors’ remuneration on firm performance. In this case, corporations owned by families have a stronger positive moderating effect compared to non-family firms. Our study has significant policy implications with respect to how the Securities Commission (SC) should design and implement proper rules and regulations to govern remuneration of non-executive directors’ remuneration as well as how the SC should govern the tenure of the independent directors within the remuneration committee in East Asian emerging market firms where Agency Problem Type II is prevalent and ownership is highly concentrated
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Ramalho, Joaquim JS, Rui MS Rita, and Jacinto Vidigal da Silva. "The impact of family ownership on capital structure of firms: Exploring the role of zero-leverage, size, location and the global financial crisis." International Small Business Journal: Researching Entrepreneurship 36, no. 5 (January 29, 2018): 574–604. http://dx.doi.org/10.1177/0266242617753050.
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In this article, we investigate the influence of family ownership on firm leverage across different subgroups of family and non-family firms. In addition, we examine the influence of firm size, geographical location and the 2008 global financial crisis on the capital structure of family firms. In both cases, we study the probability of firms using debt and, conditional on its use, the proportion of debt issued. We find that family ownership affects both decisions positively, namely, when the firm is large or located in a metropolitan area. For small firms located outside metropolitan areas, there is no clear family ownership effect. We also find the 2008 crisis had a substantial, but diversified, impact on family firm leverage. On the one hand, all family firms were more prone to use debt after 2008; on the other, the proportion of debt held by levered family firms decreased for micro and small firms, but increased for large firms. Overall, the crisis effects on family firm leverage seem to be the result of both supply- and demand-side factors, with the former particularly affecting the availability of debt to micro and small firms.
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Haider, Jahanzaib, Abdul Qayyum, and Zalina Zainudin. "Are Family Firms More Levered? An Analysis of Family and Non-Family Firms." SAGE Open 11, no. 2 (April 2021): 215824402110223. http://dx.doi.org/10.1177/21582440211022322.
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This study analyzes the leverage policies of the family and non-family firms of eight East Asian Economies (Hong Kong, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, and Taiwan) by using combined data of 690 family and non-family firms with 3,224 firm–years over the period 2006–2010. This study has used an ordinary least squares (OLS) regression for analyzing the data for the first question, while for the second question, logit regression has been used as the dependent variable (a binary variable). Prior research on family and non-family firms has revealed that family firms issue less (high) debt than non-family firms. Our analysis on a sample of East Asian Economies discloses that family firms have significantly different leverage levels than non-family firms, but their signs are not consistent. On the contrary, when the owner works as CEO/Chairman or member of the Board of Directors, then the family firms issue less debt than the non-family firms. Besides that, this study adds a new question that has not been addressed in the prior studies. The new question has focused on the speed of leverage adjustment. It is found that family firms and non-family firms regarding their debt maturity structure (short-term debt and long-term debt), the speed of leverage adjustments, and their decision to issue securities (i.e., debt vs. equity) are not significantly different. This study concluded that though family firms have a strong influence on each economy, but in South-East Asian countries, leverage policies of the family firms are not much different than that of non-family firms.
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Mucci, Daniel Magalhães, Ann Jorissen, Fabio Frezatti, and Diógenes de Souza Bido. "Managerial Controls in Private Family Firms: The Influence of a Family’s Decision Premises." Sustainability 13, no. 4 (February 17, 2021): 2158. http://dx.doi.org/10.3390/su13042158.
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In most studies, the affiliation of the manager (family-affiliated or non-family affiliated) and supposedly related behavior (agent or steward) is considered the sole antecedent to explain a family business’ (non) professionalization of managerial controls. This paper, based on Luhmann’s new system theory, examines whether a family’s decision premises influence the design of managerial controls in family firms in addition to a manager’s family affiliation status. Using survey data of 135 large and medium-sized Brazilian family firms and testing the hypotheses with SEM, this study provides evidence that a family’s decision premises significantly influence the design of managerial controls in family firms. This study provides evidence that when a family’s intention to transfer the firm to next generation (TGO) is high, more formal controls, as well as controls of a more participative nature are adopted in a family firm. Moreover, the results do not indicate that the level of family involvement in management affects the design of controls in firms with high TGO. The results only showed a significant relationship between a family’s intention to control and influence (FCI) the firm and the absence of participative controls. In addition, these findings also illustrate that each single family-induced decision premise has the potential to explain family firm behavior, since each of the two premises considered in our study is related to a different design of the controls adopted by the family firm.
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Ibrahim, Haslindar, Abdul Hadi Zulkafli, and Gul Jabeen. "Board Education, Growth and Performance of Family CEO Listed Firms in Malaysia." International Journal of Banking and Finance 15 (July 31, 2020): 25–46. http://dx.doi.org/10.32890/ijbf.15.2.2020.7438.
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This paper examines the relationship between board education, board size, growth, ownership and firm performance of family CEO and nonfamily CEO listed firms in Malaysia. A sample of 37 firms and data were collected over a period of five years from 2012 to 2016. The 37 samples of family firms were subdivided into family CEO (21), and non-family CEO (16) firms. The independent variables were board education as measured by the proportion of board degrees (BDEG) and the proportion of board professional qualifications (BPRO), board size (BSIZE), growth, and ownership. Meanwhile, firm performance was measured by using return on equity (ROE) and return on assets (ROA). The findings showed that there was a significant difference between family CEO and non-family CEO firms at a five percent level for board professional qualifications confirming that altruism and nepotism were observed among family members which supported the argument of characteristics of nepotism such as granting jobs to family members regardless of merit. In addition, this study also found board professional qualifications as significant but negatively related to external firm performance in family CEO firms. This showed that board education has not really been emphasized among board members. Besides, growth has significant influence on family firm performance which is evidently reflected in their contribution to the country’s GDP.
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Memili, Esra, Hanqing Chevy Fang, and Dianne H. B. Welsh. "Value creation and value appropriation in innovation process in publicly-traded family firms." Management Decision 53, no. 9 (October 19, 2015): 1921–52. http://dx.doi.org/10.1108/md-06-2014-0391.
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Purpose – The purpose of this paper is to examine the generational differences among publicly traded family firms in regards to value creation and value appropriation in the innovation process by drawing upon the knowledge-based view (KBV) and family business literature with a focus on socioemotional wealth perspective. Design/methodology/approach – The authors tests the hypotheses via longitudinal regression analyses based on 285 yearly cross-firm S & P 500 firm observations. Findings – First, the authors found that family ownership with second or later generation’s majority exhibits lower levels of value creation capabilities compared to non-family firms, whereas there is no difference between those of the firms with family ownership with a first generation’s majority and non-family firms. Second, the authors also found that family owned firms with a first generation’s majority have higher value appropriation abilities compared to nonfamily firms, while there is no significant difference in value appropriation between the later generation family firms and non-family firms. Research limitations/implications – The study help scholars, family business members, and investors better understand family involvement, and how it impacts firm performance through value creation and value appropriation. Originality/value – The paper contributes to the family business, innovation, and KBV literature in several ways. While previous family business studies drawing upon resource-based view and KBV often focus on the value creation in family governance, the authors investigate both value creation and value appropriation phases of innovation process.
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Rake Setyawan, Rai, and Adhitya Rechandy Christian. "PERBANDINGAN KINERJA KEUANGAN, STRUKTUR MODAL, DAN NILAI PERUSAHAAN PADA PERUSAHAAN KELUARGA DAN PERUSAHAAN NON-KELUARGA." Jurnal Fokus Manajemen Bisnis 12, no. 2 (October 1, 2022): 151–59. http://dx.doi.org/10.12928/fokus.v12i2.6283.
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This study aims to determine the differences in the financial performance, capital structure, and firm value in family and non-family firms listed on the Indonesia Stock Exchange 2017-2019. The sampling method in this study used purposive sampling technique and data analysis used a pairwise sample methodology by comparing family and non-family firm. The results of this study indicate that there is no difference in finance performance as proxied by sales growth, sales, return on asset (ROA), return on equity (ROE), gross profit margin (GPM), net profit margin (NPM), but there are significant differences in total asset turn over (TATO). The capital structure also shows that there is no difference between the debt to total asset ratio (DAR) and the debt to total equity ratio (DER) proxy, but there is one significant proxy, namely pre-sales working capital and there is no difference in firm value as proxied by earning per share EPS between family and non-family firm.
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Aoi, Michikazu, Shigeru Asaba, Keiichi Kubota, and Hitoshi Takehara. "Family firms, firm characteristics, and corporate social performance." Journal of Family Business Management 5, no. 2 (October 12, 2015): 192–217. http://dx.doi.org/10.1108/jfbm-08-2013-0019.
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Purpose – The purpose of this paper is to explore corporate social performance attained by listed family and non-family firms in Japan. They are measured by the composite CSP index and five attributes composed of employ relations, social contributions (SCs), firm security and product safety, internal governance and risk control, and environment concern. Design/methodology/approach – The authors employ univariate and regression analyses on the quantitatively aggregated CSP score data of Japanese firms from 2007 to 2009. Findings – Japan non-family firms tend to perform better than family firms in terms of attaining corporate social performance overall. Family CEOs positively affect CSP in the foods, textiles and apparels, and pharmaceutical industries as well as in retail trade, wholesale, and services industries, but negatively affect CSP in the heavy manufacturing industry. In these industries the joint effect of the percentage of family shareholdings and the fraction of family members on the board also augments the positive role played by family CEO. The findings are robust when the sample is ranked by Tobin’s q. Research limitations/implications – The observation period is short due to the data availability of CSP by Toyo Keizai Inc. This data covers all the listed firms which answered the questionnaire, which may also contain sample selection problems. Practical implications – Positive role of CEO and negative effects of shareholdings among listed family firms in Japan call for attention and corrective measures for top management and family shareholders. Social implications – While family firms in Japan may accumulate socioemotional wealth, they should exert more efforts to advance CSP and create social capital. Originality/value – This is the first comprehensive quantitative study in the field, which explored CSP of all the listed family firms vs non-family firms in Japan with large sample.
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Ing Malelak, Mariana, Christina Soehono, and Christine Eunike. "Corporate Governance, Family Ownership and Firm Value: Indonesia Evidence." SHS Web of Conferences 76 (2020): 01027. http://dx.doi.org/10.1051/shsconf/20207601027.
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The research objective to assess the influence of corporate governance and family ownership on firm value non-financial firms listed in Indonesia. The board and ownership structure were representing corporate governance characteristics. The board structure consists of commissioners, directors and independent commissioners, while the structure of ownership consists of institutional, public and managerial ownership. This research used data non-financial firms listed in Indonesia Stock Exchange period 2008 to 2018. Using purposive sampling as technique’s to filter the samples and panel data analysis method. The results of research state that corporate governance (board and ownership structure) and family ownership simultaneously have a significant influence on firm value. Partially, independent commissioners, board of directors, public and institutional ownership have a significant influence on firm value. Meanwhile the board of commissioners, managerial and family ownership have no significant influence on firm value.
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Withers, Michael C., Francesco Chirico, Giuseppe Criaco, and Massimo Bau'. "Employee Mobility in Family and Non-Family Firms: The Role of Family Firm-Specific Human Capital." Academy of Management Proceedings 2020, no. 1 (August 2020): 17634. http://dx.doi.org/10.5465/ambpp.2020.17634abstract.
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Amato, Stefano, Rodrigo Basco, Silvia Gómez Ansón, and Nicola Lattanzi. "Family-managed firms and employment growth during an economic downturn: does their location matter?" Baltic Journal of Management 15, no. 4 (June 23, 2020): 607–30. http://dx.doi.org/10.1108/bjm-07-2019-0260.
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PurposeThis study investigates the relationship between family-managed firms and firm employment growth by considering the effects of location and economic crisis as moderating variables.Design/methodology/approachThe study uses random-effect models on a large panel dataset of Spanish manufacturing firms covering 2003 to 2015 to estimate the joint effects of municipality size and economic crisis on firm employment growth.FindingsThe analysis reveals a positive association between family-managed firms and employment growth. However, this association is not uniform across space and time. When it considers location, the study finds that municipality size positively affects employment growth in family-managed firms but not in non-family firms. Additionally, while the study reveals that both firm types experience negative employment growth during the early stage of the global economic crisis (2007–08), it also finds that family-managed firms located in small municipalities downsize less than their non-family counterparts.Originality/valueThis study provides new evidence on the resilience of family-managed firms during economic crises, particularly those located in geographically bounded settings, such as small municipalities. When an adverse event, such as an economic crisis, jeopardizes employment levels, the embedded and trust-based relationships, between a family firm and its community leads them to prioritize employees' claims. However, family-managed firms' commitment to preserve jobs in small municipalities cannot be maintained over the long term; this effect disappears if the economic crisis is protracted. This study sheds new light on family-managed firms' distinctive behavior toward with local communities.
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Saidat, Zaid, Claire Seaman, Mauricio Silva, Lara Al-Haddad, and Zyad Marashdeh. "Female Directors, Family Ownership and Firm Performance in Jordan." International Journal of Financial Research 11, no. 1 (October 10, 2019): 206. http://dx.doi.org/10.5430/ijfr.v11n1p206.
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This study examines the impact of female directors on the financial performance of family and non-family Jordanian firms. A sample of 103 Jordanian public firms listed on Amman Stock Exchange for the time period 2009-2015 was selected. The study had a quantitative approach and used a panel data methodology. The data analysis was conducted using Ordinary Least Square Regression. ROA and Tobin’s Q were deployed as measurement of financial performance. The appointment of female directors does not have any significant impact on the financial performance of family firms. However, with regard to non-family firms, female directors appeared to have a negative impact on the performance of these firms. The impact of female directors on family firm performance merits further research in the context of different countries and cultures. Appointments based on qualifications and expertise is more likely to have a positive impact. Jordan is an under-researched area where the impact of female directors on the firm performance would merit further research. Differentiating between the impact of female directors on family and non-family firms would also merit further research, especially in the context of the conditions under which they are appointed.
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Giraldez-Puig, Pilar, and Emma Berenguer. "Family Female Executives and Firm Financial Performance." Sustainability 10, no. 11 (November 12, 2018): 4163. http://dx.doi.org/10.3390/su10114163.
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The aim of this paper is to analyze the relationship of family executive women with firm performance in family firms. We have obtained a final sample of 269 family and non-family firms (comprising 3073 firm/year observations) from the Spanish High Council of Chamber (SHCC) website, while data were collected from System for Analysis of Iberian Balances database (SABI) for the period 2000 to 2011. Applying a generalized method of moments (GMM) panel data methodology, we observe a positive effect on the return on assets (ROA) depending on the existence of family ties of executive women. Several implications for the career development of women in family firms arise from our results.
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Razak, Nazrul Hisyam Ab, and Salmi Huwaina Palahuddin. "Director remuneration, family ownership and firm performance: An analysis from Malaysian listed firm for period of 2005 till 2013." Corporate Ownership and Control 14, no. 2 (2017): 98–113. http://dx.doi.org/10.22495/cocv14i2art10.
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This study examines the association between directors’ remuneration, corporate governance structures and firm performance of 140 Malaysian listed firms which 70 firms are family firm and 70 firms are non-family. Data has been collected through annual reports in Bursa Malaysia’s database from 2005 till 2013. The results show that firm performance is positively and significantly related to directors’ remuneration, firm’s growth and size measured by ROA, ROE and Tobin’s Q. However, firms’ performance in this study is not responsive to anticipated future market valuations in Stock returns. The study also finds that family ownership leads to lower performance than non-family owned firms on accounting measurement (ROA and ROE) and market measurement (Tobin’s Q ) after controlling company specific characteristics. The findings also reveal that role duality has no significant effect on accounting and market performance. Meanwhile the study explores that firm performance is negatively and significantly related to leverage. The findings can be useful to regulators to limit director’s influence over remuneration packages especially in family firm. The study also contributes to the growing literature on executive and directors’ remuneration and it provides international evidence on the effects of corporate governance reforms in recent years in influencing boardroom remuneration and ownership structure on a firm’s efficiency and performance.
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Ayu Sheilla, Ayu Sheilla Rachmawati. "PENGARUH FAMILY-CEO dan DIRECT OWNERSHIP TERHADAP KEBIJAKAN DIVIDEN FAMILY-FIRM." JWM (JURNAL WAWASAN MANAJEMEN) 10, no. 1 (March 22, 2022): 10–21. http://dx.doi.org/10.20527/jwm.v10i1.190.
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We investigate the effect of family-CEO on firm’s dividend policy at Indonesia firm of Consumer Goods sector in 2016-2020. In this study, researchers focused on dividend policy by applying the family firm literature and agency problem theory to obtain or detect differences. This research use multiple regression analysis with Eviews software. We show that family-CEO firms pay same amount of dividends with nonfamily-CEO firms do. Empirically, this study proves that family CEO companies do not have a significant relationship with dividend policy, with the hypothesis being examined that family CEO companies pay less dividends than non-family CEO companies and the direction of influence of the company Family CEO on dividend policy is negative. In addition, that direct ownership has a significant positive effect on dividend policy. This shows that the company with direct ownership, the higher the company distributes dividends to shareholders. Investors can use this research to get more information about family firm before investing on it.
Keywords: family-CEO, dividend policy, family firm
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Rafique Yasser, Qaiser. "Corporate Governance and Firm Performance: An Analysis of Family and Non-family Controlled Firms." Pakistan Development Review 50, no. 1 (March 1, 2011): 47–62. http://dx.doi.org/10.30541/v50i1pp.47-62.
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The aim of this study is to scrutinise the impact of corporate governance mechanism on on the performance of family and non-family controlled firms in Pakistan. It has been found that a corporate governance structure influences the performance of both family and non-family controlled companies significantly. However all corporate governance mechanisms are not significant as the significant variables differ between family and non-family controlled companies. Thus, regulators need to be cautious in setting codes for different companies. JEL classification: G34, L21, L25 Keywords: Corporate Governance, Firm Performance
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Al-Okaily, Jihad, and Salma Naueihed. "Audit committee effectiveness and family firms: impact on performance." Management Decision 58, no. 6 (April 15, 2019): 1021–34. http://dx.doi.org/10.1108/md-04-2018-0422.
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Purpose The purpose of this paper is to empirically examine the relationship between audit committee characteristics and firm performance, and whether family ownership and involvement moderate the latter relationship. Design/methodology/approach Following Anderson and Reeb (2003), this paper estimates a two-way fixed effects model. A sub-sample analysis is used by first examining the impact of audit committee effectiveness on firm performance only in non-family firms and then only in family firms. A fully interacted model was also analyzed in the robustness tests. Findings This paper finds that the audit committee characteristics of size, expertise and meeting frequency are positively and significantly related to non-family firm performance, while insignificantly related to family firm performance. Research limitations/implications The evidence reported in this paper may be of use for regulators and policy makers pondering corporate governance reforms, as well as for investors, managers and minority shareholders concerned with firm performance and valuation. Originality/value To the best of the authors’ knowledge, this is the first study of its kind to examine the moderating effect of family control and involvement on the relationship between firm performance and audit committee effectiveness in terms of size, expertise and meeting frequency.
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Hernández Linares, Remedios, and María Concepción López Fernandez. "Entrepreneurial orientation, learning orientation, market orientation, and organizational performance: Family firms versus non-family firms." European Journal of Family Business 10, no. 1 (May 31, 2020): 6–19. http://dx.doi.org/10.24310/ejfbejfb.v10i1.6780.
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Firms develop and use multiple strategic orientations. However, the investigations considering more than one strategic orientation are scant and have paid scant attention to the singular context of family firms, despite the growing evidence of their special strategic behavior. To cover these research gaps, we analyze the combined effects of three strategic orientations (mainly, entrepreneurial orientation, learning orientation, and market orientation) on family firm’s performance, by comparing family firms and non-family firms from Spain and Portugal. Our results show that the entrepreneurial orientation is the strategic orientation with higher impact on family firm performance, followed by market orientation, so, our work offers family firms some insights to an improved performance. In addition our work contributes to literature by corroborating the idea of strategic equifinality.
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Low, Pek Yee, and Abdul Majid. "CEO dominance, family control and modified audit opinions in Hong Kong." Corporate Ownership and Control 5, no. 2 (2008): 179–87. http://dx.doi.org/10.22495/cocv5i2c1p3.
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This study using Hong Kong data examines the linkages between CEO dominance (CEO and Chairman is the same individual), family ownership and control, and the likelihood that firms receive modified audit opinions. Logistic regression results using a matched pair design of 89 firm-years with modified audit opinions for 1997 to 1999 and 89 firm-years with unqualified audit opinions (control sample), show that family controlled firms are less likely to receive modified audit opinions than non-family controlled firms, and the positive association between CEO dominance and modified audit opinions is evident only for non-family controlled firms. This suggests that the abuse of power arising from CEO dominance may be mitigated by the presence of family ownership and control.