The impact of financial support from non-resident family members on the financial performance of newer agribusiness firms in India

Abstract

PurposeThe purpose of this paper is to examine the impact of financial support from non-resident family members (FSNRFM) on the financial performance of newer agribusiness firms in India.Design/methodology/approachOwners of newer agribusiness firms (five years old or less) from India were surveyed regarding the perceived impact of FSNRFM on the financial performance of newer agribusiness firms.FindingsThe results show that newer agribusiness firms with FSNRFM perform better than those without FSNRFM; and build higher levels of internal financing sources relative to the newer agribusiness firms without FSNRFM, which, in turn, improves their performance.Research limitations/implicationsThis is a co-relational study that investigated the association between FSNRFM and financial performance of newer agribusiness firms. There is not necessarily a causal relationship between the two. The findings of this study may only be generalized to firms similar to those that were included in this research.Originality/valueThe study enriches the literature concerning newer agribusiness firms and the factors that improve their financial performance. The results of this study can be of great significance for owners of these firms, financial managers, farm management consultants, and other stakeholders to understand the impact of FSNRFM on financial performance of newer agribusiness firms.