Role Of Family Firms Research Articles

Role of Technological Innovation and Its Governance in Entrepreneurial Evolution

Studies showcase various aspects of innovation strategies, knowledge sharing, and the role of family firms. Despite this, the authors note the lack of a comprehensive review of technological innovation in entrepreneurship research. This study provides an overview of the relationship between entrepreneurship and technological innovation by conducting a systematic literature review spanning four decades, from 1979 to 2020. It aims to answer three research questions related to the theories and methodologies used, the examined themes, and the implications for researchers while emphasizing the role of electronics governance. Furthermore, the study identifies several key themes in literature, including social capital and entrepreneurship, economic growth and entrepreneurial economy, policy intervention, knowledge economy, and tech venture development. These themes reflect the multifaceted nature of the relationship and offer valuable insights for future research.

Was CSR in our minds? The relevance of CSR in the vision and mission of Indian companies through the lens of ownership

PurposeThis study aims to explore the patterns of corporate social responsibility (CSR) practices and investments across different ownership groups and relevance of CSR practices in the vision and mission (V&M) statements of firms.Design/methodology/approachThe paper uses the neo-institutional theory approach, which explains similarities and differences in the CSR practices of organisations embedded within (and between) similar sectoral contexts. The study accounts the CSR activities of the top 100 companies listed on the Bombay Stock exchange (BSE) based on their ownership and checks the overlap of the CSR activities conducted by the companies with the ongoing social development schemes launched in India during the same of time. The time period between 2017 and 2020 is chosen to analyse the CSR studies. The study uses content analysis technique to derive conclusions. A textual analysis of top 100 listed firms across all ownership groups aimed at understanding patterns of CSR practices opted by the different groups and coherence of CSR patterns in the V&M statements. CSR related keywords were analysed in the V&M statements to understand what influence reporting of CSR practices in the strategic communication of firms.FindingsOverall analysis indicated that top 100 firms prefer to invest in the areas of “Education”, “Sustainability” “Skill” where public-owned firms preferred towards “Sanitation” and “Environment/Sustainability” showing concurrence with local development goals. Private and foreign groups preferred to park their CSR funds in “Education” and “Skill” development showing coherence with the global agendas. Public-owned firms tend to report more CSR related specifically “Environment’ and “Sustainability” in the strategic documents. However, private and foreign firms do not pay any significance to CSR related keywords in their V&M statements.Research limitations/implicationsFindings suggest that despite of huge CSR investments, private and foreign-owned firms lack CSR focus and communication in their V&M statements, which may create disintegration in the CSR investment and strategic alignment of near-term and future goals. The paper suggests that private and foreign firms should also communicate their CSR practices through their V&M to stakeholders so that CSR practices may not remain mere 2% mandated expenditure by the Government of India.Originality/valueThe study contributes in confirming the success of the CSR policy mandate in supplementing government’s social development programmes along with indications on the role of family firms in accelerating the process of community development as compared to foreign firms. The study also favours integration of CSR disclosures in the V&M statements to gain long-term benefit out of these investments.

Non‐family shareholder governance and the digital transformation of family firms: Evidence from China

AbstractResearch Question/IssueWe investigate the influence of non‐family shareholder governance on Chinese family firms' digital transformation strategies.Research Findings/InsightsWe use the socioemotional wealth theory to examine the impact of non‐family shareholder governance on family firms' digital transformation. We find that the influence of non‐family shareholder governance by appointing directors can significantly promote the implementation of digital transformation strategies through their capital and human effects in family firms. In contrast, non‐family shareholders only play a positive role in family firms' digital transformation when they are blockholders. In addition, non‐family shareholder governance plays a significant role in promoting the digital transformation of family firms with entrepreneurship and a high degree of industry competition. Regarding external digital development, the Broadband China policy complements family firms' digital transformation strategies. The characteristics of the appointed directors suggest that the introduction of appointed directors, an excess of appointed directors, and the inclusion of appointed directors with digital expertise can effectively promote the digital transformation of family firms. The characteristics of controlling families show that socioemotional wealth can further optimize the relationship between non‐family shareholder governance and digital transformation.Theoretical/Academic ImplicationsWe not only verify the rationality and effectiveness of non‐family shareholder governance in combination with digital transformation strategies but also further observe the impact of the heterogeneity of directors appointed by non‐family shareholders on family firms' digital transformation strategies. Thus, our study tests the influence of non‐family shareholder governance on digital transformation and enriches the literature on non‐family shareholder governance and family firms' strategies.Practitioner/Policy ImplicationsThis study offers insights to family firms regarding how to effectively promote non‐family shareholders' participation in corporate governance and help family firms to achieve the goal of “everlasting foundation.”

Rapid Dynamics of Top Wealth Shares and Self-Made Fortunes: What Is the Role of Family Firms?

We derive an analytical link between the fast dynamics of inequality at the top of the wealth distribution and the prevalence of newly created fortunes. Specifically, in the context of a random growth model of wealth accumulation, the shape of the top of the wealth distribution changes rapidly only if the pace with which new fortunes are created is fast. Quantitatively, the decision of a few families to bear a large amount of idiosyncratic risk in the form of family firms is crucial in accounting for both the prevalence of new fortunes and the dynamics of top wealth inequality. (JEL D22, D31, G32, L25)

Accountants in family firms—a systematic literature review

The purpose of this article is to review the body of the literature on the role of individual accountants in the context of family firms, synthesize the findings, outline directions for future research, and to present an integrative framework that summarizes these directions. The study utilizes a systematic literature review approach and is guided by three overarching questions related to the field’s development, a reflection on current state-of-the-art research, and an outlook for the field’s future paths. The questions are answered through the mapping and analysis of 39 key articles over a 20-year period. We show central patterns in theory, data, methods, and findings. Our review reveals that the literature is scattered, and that the role of accountants is found to be context dependent. In existing research, an accountant tends to have the roles of a traditional bean counter, a decision-maker, an advisor, and a protector and mediator. Scholars also show that an accountant influences various organizational outcomes in family firms. The review further reveals that accountants can play a key role in accounting- and strategy-related decisions with impact on family firm’s survival and growth. We offer a map of the research on accountants in family firms and an integrative framework. This work does not only highlight the importance of an accountant’s role in family firms but it also allows us to identify numerous research gaps and a pathway for future research in terms of methods, theories, and models.

Are Family Firms Doing More Innovation Output With Less Innovation Input? A Replication and Extension

The role of family firms in innovation and the question of whether family firms show differences in innovation investments and outcomes are intensely debated. To address these issues, Duran, Kammerlander, van Essen, and Zellweger (2016) published a meta-analytic structural equation model showing that family firms produce more innovation output with less innovation input. In the present article, we present the results of two empirical studies. Study 1 replicates the original methodological approach and study 2 provides an extension by using an updated and enlarged sample of 290 papers, adopting a more advanced multilevel approach, and controlling for firm age. The results show that while we could successfully replicate the original results of DKEZ in study 1, study 2 revealed only a weak negative effect of family firm status on innovation input and no effect on innovation output. Our results suggest that family firms are not producing more innovation output with less innovation input and that further research should focus on the heterogeneity within the group of family firms rather than simply comparing family to nonfamily firms. We close with a discussion of the methodological implications for meta-analyses in entrepreneurship research and a call for future research on family firm innovation. Our dataset and analytical procedures are publicly available.

Corporate Social Responsibility and Value of Cash Holdings in Taiwan: The Role of Family Firms

Abstract This paper is to shed light on the relationship between corporate social responsibility (CSR) and cash value at family businesses using 3630 firm-year observations representing 395 listed Taiwanese companies. The results indicate that CSR has a significantly positive impact on cash value at family businesses, but no apparent relationship is supported at non-family businesses. Regarding the CSR activities, environmental protection, corporate commitment and corporate governance are consistently and significantly confirm the positive effects on corporate cash value at the family business, but social participation does not confirm this finding. The above results imply that conflict resolution view/or socio-emotional wealth view is evidenced at the relationship between family firm’s CSR and cash value. To the best of our knowledge, our results are firstly documented on the relationship between cash value and CSR of family business and thus make major contributions to related literature of family business. JEL classification numbers: G32, G34, M14. Keywords: Family Business, Corporate Social Responsibility, Cash Value.

Are family firms good neighbours? A spatial analysis of Italian technology-intensive firms

PurposeA burgeoning body of evidence points out the importance of spatial proximity in influencing firm efficiency besides internal characteristics. Nevertheless, the family status of the firm has been traditionally overlooked in that debate. Therefore, this study aims to investigate productivity spillovers stemming from the geographical closeness to innovators and family firms.Design/methodology/approachUsing secondary data on Italian technology-intensive manufacturing firms, the paper exploits spatial econometric models to estimate productivity spillovers across firms.FindingsAs regards the presence of spatial dependence, this study reveals that a firm's level of efficiency and productivity is influenced by that of nearby firms. Specifically, three main results emerge. First, spatial proximity to innovators is beneficial for the productivity of neighbouring firms. Second, closeness to family firms is a source of negative externalities for spatially proximate firms. However, and this is the third result, the adverse effect vanishes when the nearby family firms are also innovators.Research limitations/implicationsAs the study relies on cross-sectional data, future research should explore productivity spillovers in a longitudinal setting. Additionally, the channels through which productivity spillovers occur should be measured.Practical implicationsThe study highlights the importance of co-location for public policy initiatives to strengthen the competitiveness of firms and, indirectly, that of localities and regions. Moreover, the findings show the crucial role of innovation in mitigating the productivity gap between family and non-family firms.Social implicationsNotwithstanding the advent of the digital era, spatial proximity and localized social relationships are still a relevant factor affecting firms' performance.Originality/valueBy exploring the role of family firms in influencing the advantages of geographical proximity, this study contributes to the growing efforts to explore family enterprises across spatial settings.

Knowledge Networks and the Role of Family Firms: The Case of an Italian Regional Cluster

Studies on open innovation (OI) have highlighted the importance of inter-organizational knowledge networks. However, little is known about OI networks established by family firms, and their roles in such knowledge networks. By focusing on one of the most important Italian footwear clusters, this paper applies Social Network Analysis to investigate the role of family firms in exchanging knowledge according to their intra-cluster position and extra-cluster openness. Our results provide novel evidence on the role of family firms in OI networks, as they suggest that family firms mainly operate as gatekeepers in the technological and managerial networks, while they act as external stars in the market and managerial networks.

The role of family firms’ generational heterogeneity in the entry mode choice in foreign markets

This paper investigates how important sources of heterogeneity shape the way in which family firms (FFs) enter foreign markets. By integrating insights from International Business and Family Business literature, we claim that the interplay between the generation ruling the firm and the presence of non-family board members direct the choice between a greenfield investment vs. the acquisition of a local unit. FFs prefer to enter foreign markets through greenfield investments, especially when run by the founders, due to their emotional attachment to the firm and to the lack of adequate organizational capabilities to undertake and manage cross-border acquisitions. The bias towards greenfield investments is corrected by the presence of non-family members in the board. However, we claim that non-family directors’ voice is on average more effective in second-generation FFs as they show an average lower SEW orientation, while FFs surviving in the long term are those ruled by the successors more authoritative in imposing attention on the preservation of family values. Therefore, third-and-beyond generation FFs present a higher SEW orientation as well as diversified organizational capabilities, which make them less incline to follow external advice. We test our hypotheses on a sample of 1,849 manufacturing initiatives undertaken abroad by 532 Italian FFs in the period 2000–2013.

Limiting role of resource dependence: an examination of director interlocks, board meetings and family ownership

PurposeThis paper attempts to examine the activity and involvement of board of directors in internationalization activities of firms in emerging markets, by evaluating the resource provisioning roles of interlocks provided by board of directors, and the frequency of board meetings. We demonstrate that the effectiveness of board involvement is contingent upon the levels of family ownership in firms since family ownership could impact the firm’s ability to utilize the presence of different types of board members.Design/methodology/approachThe authors test our hypotheses on a sample of listed Indian companies, extracted from the Prowess database published by the Centre for Monitoring Indian Economy (CMIE), a database of the financial performance of Indian companies. On a panel of 3,133 firm years of 605 unique Indian firms with foreign investments, over a time period of 2006–2017, the authors apply different estimation techniques.FindingsThe results demonstrate that both board meeting frequency and director interlocks are instrumental in supporting internationalization activities in emerging market firms. However, family ownership moderates the role of insider and independent interlocks on internationalization investments in different ways; the authors find that interlocks provided by independent directors support internationalization activities in family firms, whereas those provided by insider directors do not. Further, the study also finds that board meetings are less effective in internationalization of family firms.Practical implicationsThe authors conclude that family firms aiming at international diversification require to develop more connected and networked independent directors to enable internationalization in firms. While independent director interlocks enhance the international investments, it is also useful to know that board meetings are ineffective in utilizing the resources in family firms. This points to the possibility that family firms should device mechanisms to integrate family meetings with board meetings so that they can utilize the within-family processes to aid in their internationalization decisions.Originality/valueThe study contributes to resource dependence theory by understanding its limiting role in family firms. Theoretically, it helps delineate the limiting resource provision role of the insider directors vis-à-vis independent directors. The authors argue that the resource provision role of insider director interlocks does not effectively help in internationalization in comparison to independent director interlocks in family-dominated firms. Consequently, the study shows the limiting role of resource provision and utilization by family-owned firms in comparison to non-family-owned firms.

Big data in family firms: A socioemotional wealth perspective

Since about 2010, big data analysis has drastically changed the landscape of information management by becoming a central topic in the academic literature of several fields. Despite the significant contribution of family firms to the economic fabric worldwide and their unique decision-making processes, there is a lack of research investigating big data in family-owned businesses. To address this gap, this article draws on the socioemotional wealth (SEW) perspective and its FIBER model to conceptually investigate its role in family firms’ decision to implement big data. We introduce a set of propositions and a framework linking the FIBER dimensions to the likeliness of implementing big data in family firms. Our research thus contributes to a more fine-grained understanding of the decision-making process in family firms.

Resilience and related variety: The role of family firms in an ocean-related Norwegian region

Recent research in economic geography has introduced two notions that historical studies should explore: regional resilience and related variety. Regional resilience refers to a region’s ability to recover from external shocks. Related variety refers to the existence of related industrial sectors in a region, and the relatedness promotes economic development due to spill-overs between sectors. From an evolutionary perspective, external shocks result in new development paths in regions with related variety. This is a dynamic process well suited to historical studies. This article argues that historical studies can contribute to this literature by studying how related sectors interact in resilient regions. We propose that family firms may act as a micro-coordination mechanism by moving financial and human resources from one sector to another related sector as a response to shock. The paper develops this argument by studying how six major regional business families within ocean industries reacted to external shocks over time.

Accrual earning management and future performance: Evidence from family firm in Indonesia

The purpose reasearch is to examine the effect of earnings management on future performance. We also will assess whether auditor have important role in family firms. The population is all companies listed on the Indonesian stock exchanges from 2012 to 2014 (financial industry was excluded). The total sample used in this study as many as 918 firm-years or observations. Model by Kaznik (1999) model was used as an earning management proxy because it better than the other models. We suggest that the average value of the firms family future performance (CFOt+1 and NIt+1) is greater than non-family firms. We also show that accrual earnings management in Indonesia is more efficiency than opportunistic. Accrual earning management which conducted by Family Firms is more efficient than Non-Family Firms. Finally, auditor in family firms will increase future performance.

Understanding 100 Years of the Evolution of Top Wealth Shares in the U.S.: What is the Role of Family Firms?

Understanding 100 Years of the Evolution of Top Wealth Shares in the U.S.: What is the Role of Family Firms?

Does a religious identity matter? Impact of organizational identity on ethics in family firms

This paper investigates how religiousness and organizational identity influence ethical behavior in family firms. Religion often plays a key role in family firms. These firms base their beliefs on ...

The Role of Family Firms in Environmental Sustainability

Family firms are important and dynamic participants in the world economy. They account for two thirds of all businesses around the world, constitute between 70 and 95% of all business entities in m...

Innovative family startups: an emerging research field

Purpose of the paper: The paper aims to study the value creation of Innovative Pure Family Startups (IPFS), which are innovative startups characterized by simple family governance, as compared to the Total population of Innovative Startups (TIS). Methodology: Adopting the T-test analysis, the contribution detects whether significant differences exist between IPFS and TIS in terms of financial structure and profitability performance. Findings: Results show that IPFS perform the best in terms of profitability. Moreover, they highlight IPFS’ preference for debt rather than opening up firm equity to external investors. Research limits: Our results are limited to IPFS and not generalizable to all Innovative Family Startups, including Innovative Professional Family Startups. Moreover, no distinction between Innovative Family Spin-off and Innovative Family Newco is made. Practical implications: Implications are related to business governance structure and organizational governance to support the managerial decision-making process. Originality of the paper: The paper tries to fill a gap in both the literature on family business and on entrepreneurship. On the one hand, it analyzes the start-up phase of family businesses that is generally neglected in family business studies. On the other hand, it detects the contribution of family governance to the innovative startup phenomenon, while focusing on the role of family firms in innovative high tech industries that traditionally under-participate compared to their non-family counterparts.

Inter‐firm R&D collaborations and green innovation value: The role of family firms' involvement and the moderating effects of proximity dimensions

AbstractThe present paper investigates the relationship between the involvement of family firms in R&D collaborations aimed at developing green solutions and the value of resulting innovations. To dig into this relationship, the moderating effects of two proximity dimensions (i.e., geographical distance and technological relatedness) are also assessed. Analyses are based on a sample of 156 joint patents classified into the “Alternative energy production” field, as defined by the International Patent Classification Green Inventory and successfully filed at the United States Patent and Trademark Office in the period 1997–2010 by publicly listed companies. According to our conjectures, results reveal a positive relationship between the involvement of family firms and green innovation value. Moreover, our findings show that this relationship is hindered when partners are geographically distant or technologically proximate. Eventually, we contribute to the literature on green innovation by unveiling under which conditions inter‐firm R&D collaborations lead to more valuable innovations.

Impact of family control on the relationship between earning management and future performance in Indonesia

This study attempts to examine whether the family control has an impact on the relationship between earnings management and future performance. We also will assess whether the auditor has the important role in family firms. The total sample in this study has covered 918 firm-years or observations. We suggest that the average value of the future performance of family-based firms is better than the one of non-family firms. We also show that accrual earnings management in Indonesia is more opportunistic than efficiency. Finally, bigger auditor firms which selected by family firms have the positive effect on future performance.