Adoptive expectations: Rising sons in Japanese family firms

Mehrotra, Vikas; Mørck, Randall; Shim, Jungwook; Wiwattanakantang, Yupana

doi:10.1016/j.jfineco.2013.01.011

Cited by 191 publications

(121 citation statements)

References 67 publications

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“…Thus, they may ignore new business opportunities and innovate less if this threatens family control (Block, 2012;Gómez-Mejía, Makri, & Kintana, 2010;Patel & Chrisman, 2014). It has also been argued that family firms can lack effective management because family top executives are drawn from a smaller talent pool than in non-family firms (Bertrand & Schoar, 2006;Mehrotra, Morck, Shim, & Wiwattanakantang, 2013;Miller, Xu, & Mehrotra, 2014). Such executives may not have the skills to successfully orchestrate growth strategies.…”

Section: Stunted Growth: the Short-term Principal-principal Agency Pmentioning

confidence: 99%

Family Business Growth Around the World

Miroshnychenko

Massis

Miller

et al. 2020

Entrepreneurship Theory and Practice

133

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Growth is important for the long-term success of a business. Regrettably, the impact of family influence on firm growth is largely neglected. We examine whether family firms have a higher growth rate than their nonfamily counterparts. Based on a large sample of firms across 43 countries over a 10-year period, we show that family firms on average have higher growth rates than nonfamily firms, and this positive effect is greater for family firms operating in strong national institutional environments which are less corrupt, more democratic, more subject to rule of law, and have effective government policies. We also find that the positive effect of family influence on firm growth varies significantly across different types of family firms and different business cycles. These findings show that family control has an economically significant impact on growth rates and important implications for both family firm theory and practice.

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Section: Stunted Growth: the Short-term Principal-principal Agency Pmentioning

confidence: 99%

Family Business Growth Around the World

Miroshnychenko

Massis

Miller

et al. 2020

Entrepreneurship Theory and Practice

133

View full text Add to dashboard Cite

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“…First, family managers often hold their position due to the willingness of family owners to preserve SEW through the perpetuation of the family legacy and influence across generations (Stewart & Hitt, 2012). For the same reason, family managers prefer to hire family members to assist them in the management of the firm's entrepreneurial strategy (Mehrotra, Morck, Shim, & Wiwattanakantang, 2013). By definition, these nepotistic appointments deprive the organization of an effective and capable human capital base to manage EO, since family managers are chosen from a smaller, and less promising, talent pool than nonfamily executives (Miller, Le Breton-Miller, & Lester, 2011).…”

Section: The Influence Of Family Management On the Eoàperformance Relmentioning

confidence: 99%

Entrepreneurial orientation and performance in private family firms: A configurational model

Bauweraerts

2018

Can J Adm Sci

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The relationship between entrepreneurial orientation (EO) and performance has received considerable attention from the family business literature. However, little is known about how EO, organizational parameters, and environmental characteristics act in combination to influence family firm performance. Drawing on the socioemotional wealth perspective, this study proposes a configurational model that considers the performance implications of EO, family management, and environmental dynamism. The empirical analysis indicates that the combination of family management, low EO, and low environmental dynamism engenders the best performance. The paper contributes to the family entrepreneurship literature by identifying the conditions under which EO leads to improved performance in family firms, and answers a recent call for more context‐based investigations of the performance effects of family managers. © 2018 ASAC. Published by John Wiley & Sons, Ltd.

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“…Previous literature has widely documented that the behavior of family firms are shaped by the culture, and psychological and social factors (Gomez-Mejia et al, 2011;Mehrotra et al, 2013;Gedajlovic et al, 2012;Bennedsen et al, 2014), so it is worthwhile investigating whether and how the unique characteristics of Chinese family firms influence our main argument that Chinese family firms with excess control rights tend to hold more cash for expropriation.…”

Section: The Effects Of Unique Characteristics Of Chinese Family Firmmentioning

confidence: 99%

Family control and corporate cash holdings: Evidence from China

Liu

Luo

Tian

2015

Journal of Corporate Finance

132

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This study examines the effect of family control on the cash holding policy in China. We find that family firms with excess control rights tend to have high cash holdings that are tunneled rather than being invested or paid to shareholders. We further show that the incentive for controlling families to hold cash and for tunneling is exacerbated by the agency conflict between controlling and minority shareholders, i.e., it is weakened after the Chinese Nontradable share (NTS) reform and strengthened by the presence of multiple large shareholders who probably play no monitoring role in Chinese family firms. Furthermore, family firms' incentive to hold cash for tunneling is influenced by the unique characteristics of Chinese firms in the following ways: the incentive is stronger when the family founder has one child and face family succession problem, and when the founder has political connections and directly involves in firm's management; while it is weakened by family founder's social interpersonal trust with other entrepreneurs through their membership of Chambers of Commerce. Overall, we argue that family firms in China tend to hold high levels of cash for tunneling, which harms firm value, while the severe controlling-minority shareholder agency conflicts and unique Chinese family characteristics only make this situation worse.

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Adoptive expectations: Rising sons in Japanese family firms

Cited by 191 publications

References 67 publications

Family Business Growth Around the World

Family Business Growth Around the World

Entrepreneurial orientation and performance in private family firms: A configurational model

Family control and corporate cash holdings: Evidence from China

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