Search

Using a behavioral theory framework, we argue that family firms are more persistent (less likely to engage in the strategic renewal form of corporate entrepreneurship) in their strategic behaviors over time than nonfamily firms owing to their goals of maintaining family tradition and parsimony. We also argue that family firms controlled by founders or having a family member as Chairman or CEO are more likely to be persistent in their strategies than family firms with different governance structures. Panel regression based on a sample of 8,748 firm-year observations of S&P 1500 manufacturing firms from 1996 to 2013 support our hypotheses. [ABSTRACT FROM AUTHOR]

This article will critically analyse the sources and the role of knowledge diversity in informing causation logics in family firms. Family firms rely on knowledge resources from both intra-family and extra-family sources, which may require different approaches to effectively manage. We argue that as family firms acquire greater knowledge diversity, family-centred effectuation processes become limited and they will increasingly rely on formal causation logics to coordinate these resources. However, we expect this relationship to differ when knowledge diversity is sourced from either family or non-family sources. Empirical analyses of 242 small- and medium-sized family firms indicate that knowledge diversity positively affects a firm's reliance on causation logics, regardless of the source of that diversity. This suggests that the affinity of family firms to leverage effectuation logics may not be characteristic of family firms in general, but instead may be an artefact of firm reliance on knowledge capital concentrated in family owners. [ABSTRACT FROM AUTHOR]

Lude and Prügl explored "family business bias," a cognitive tendency where the family nature of a firm can often reduce investors' perceived risk in investments. As a result, investors would display lower risk-avoidance in the gain domain and reinforced risk-seeking in the loss domain. We expanded the authors' work by introducing four cognitive factors (anchoring, representativeness, stereotype heuristic, and information availability) that can explain the underlying mechanisms behind the prevalence of "family business bias" and other cognitive misperceptions surrounding family businesses when it comes to investment decisions. [ABSTRACT FROM AUTHOR]

Sustainability practices are critical for family firms, as they relate directly to the continuity of the business and relationships with important stakeholders, such as members of the local community. Nevertheless, not all family firms wish to adopt sustainability practices. To examine this, we draw upon the socioemotional wealth perspective in order to develop a theoretical model of the direct negative effects of family ownership on the adoption of sustainability practices. We also suggest moderating effects of long-term orientation (LTO) on this link. Our model is tested on a sample of 195 family firms in the tourism and hospitality sector. The results support our hypothesis that family ownership negatively influences the adoption of sustainability practices. Additionally, LTO moderates the relationship between family ownership and the adoption of sustainability practices, such that family owners with a high LTO are more likely to adopt this particular practice compared to those with a low LTO. [ABSTRACT FROM AUTHOR]

As family firms begin to professionalize, they face an important crossroads in deciding whether to employ non-family managers. To preserve socioemotional wealth and minimize agency costs, family owners may resist employing non-family managers. However, industry sector may play a role that influences the employment of non-family managers. We argue that the family's reluctance will be stronger in industries where information asymmetries make monitoring managers more difficult. For industries where monitoring is easier, the benefits of employing non-family managers may offset the loss in socioemotional wealth and increase in agency costs. Results based on a sample of 965 small and medium-sized retail and manufacturing firms confirm our predictions. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

Women entrepreneurs around the world have increasingly contributed to innovation, employment, and wealth creation (Brush & Cooper, 2012; Brush, de Bruin, & Welter, 2009). Studies suggest that foreign direct investment can be an important determinant of entrepreneurship in general. However, the link between foreign ventures and women entrepreneurs remains under-researched. Therefore, we suggest that the presence of foreign ventures affects women's entrepreneurship. We develop and test our model on cross-sectional data encompassing 36 countries in 2006. The results show that foreign direct investment and women's entrepreneurship have an inverted u-shaped relationship. Implications for further research and public policy are discussed. [ABSTRACT FROM AUTHOR]