Engaging in a New Field: Business Owning Families’ Differential Approach to Impact Investing

Abstract

We develop a theoretical framework explaining why and how business owning families (BOF) engage in impact investing. Despite its exponential growth, the burgeoning field impact investing is still subject to competing interpretations and varying practices. Building on the framework proposed by Nason et al. (2019b), we argue that a BOF’s frame of reference (backward vs. forward looking and internally vs. externally oriented) constitutes a relevant heterogeneity that triggers a unique driver for engaging in impact investing and a distinct set of practices to do so.

The Influence of Socio-Emotional Wealth on the Speed of the Export Development Proces in Family and Non-Family Firms

“…Recent literature proposes that ownership is relevant (Cruz et al, 2021;Fitza & Tihanyi, 2017;Poza, 2021), specifically when a family group controls the ownership and when their members also perform a management role within the family businesses (Fernández & Nieto, 2006). Family firms incorporate SEW into their decision-making process, jointly, or even primarily, for economic objectives (Gómez-Mejía et al, 2007, 2011.…”

“…Family firms are by definition independent organizations and their decisions are oriented towards protecting this characteristic. For example, with regard to financial resources, only a small propor-tion of family firms are public; most of them will avoid losing control of ownership to large capital providers (Cruz et al, 2021) and refuse high levels of debt from banks or other financial companies (Souder et al, 2016). Something similar occurs in relation to human capital: family firms prefer to select managers and board members from the family, despite the potential adverse consequences of nepotism (Schulze et al, 2001).…”

Family Firms, Family Boundary Organizations, and the Family-Related Organizational Ecosystem

“…The use of the "dominant coalition" concept, stemming from the behavioral theory of the firm (Cyert & March, 1963), is helpful to operationalize family control and involvement in family firms (Gómez-Mejia et al, 2007, but masks the presence of potential intrafamily coalitions with divergent goals (Kotlar & De Massis, 2013;Zellweger & Kammerlander, 2015). For example, many single family offices are shifting toward the incorporation of goals associated with sustainability and impact investing (Cruz et al, 2021), often on impulse from the next generation involved in the family office, with important consequences for the allocation of family wealth (De Massis & Kotlar, 2021). Thus, future research can investigate further how intrafamily coalitions are formed and how they influence the organizational goal formation and the evolution of boundary organizations, for example, through bargaining processes.…”

The influence of family firm image on access to financial resources in family SMEs: a signaling theory perspective

“…Our study aims to fill this research gap by focusing on the effect that a projected family firm image may have with regard to small and medium-sized enterprises' (SMEs) access to financial resources. Proper access to financial resources provides broader strategic options and meets short-term financial needs (Cruz et al 2021;Michiels and Molly 2017), particularly for SMEs (Lee et al 2015), which often suffer from resource constraints (Fabrizio et al 2021). Greater access to financial resources provides firms with more options to choose from to make better strategic investment decisions (George 2005; López-Delgado and Diéguez-Soto 2020) as well as meet short-term financial needs (Schneider and Veugelers 2010).…”