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Purpose The debate over differences in the behaviors of firms facing globalization is ongoing. This study examines whether globalization impacts the behavior of family firms and if this influence differs between family and non-family firms. Design/methodology/approach Drawing on panel data from the Amadeus database on 62 family firms and 98 non-family firms in Europe, the authors employ panel vector autoregression estimation and the Wald test of Granger causality to verify our conjecture. Additional impulse response functions and the forecast error variance decomposition technique were applied to illustrate complementary shock dynamics. Additionally, the KOF globalization index is used as a proxy for globalization. Findings The results show that globalization visibly impacts family and non-family firms, but the polarity and extent of the effect are different. The authors demonstrate that family firms are in a more favorable position regarding globalization and are less vulnerable to the adverse effects of the globalization process. In contrast, non-family firms fare worse, generating adverse effects. Non-family firms take a more open stance toward globalization than family firms' more conservative behaviors. Research limitations/implications Of course, there are some limitations to the work presented in this paper. On the one hand, the authors’ data span only ten years due to data limitations. This causes the generalizability of the results to be hindered. Therefore, the authors encourage scholars to collect more time series data to increase confidence in the empirical results in future studies. On the other hand, the selection of proxy indicators concerning family firm behavior is mainly focused on financial and employment facets. A multidimensional selection of indicators could make the findings of this study more convincing. Despite its limitations, the study certainly adds to the authors’ understanding of its behavior and globalization activities. Practical implications The authors’ findings have twofold theoretical and practical implications, as they highlight the necessity of developing specific policies aimed at reducing the gap between family and non-family facing globalization and promoting sustainable operations of non-family firms. Although family firms tend to be more frugal and conservative in their overall decision-making, it should be acknowledged that stockholder and stakeholder interest-oriented corporate management policies have made them more capable of steadily improving corporate performance in the sweep of globalization. Social implications To this end, this study deepens the authors’ understanding of the theory of global governance of family firms. It also provides possible paths and directions for future theoretical research on family firms. Globalization affects both family and non-family firms, but our results suggest that family firms are better able to withstand the adverse effects of globalization shocks and adopt efficient governance paths and strategic thinking to gain a competitive advantage. In this regard, the authors encourage non-family firms to actively learn from family firms' operational practices and systems to achieve better adaptability. Originality/value This study provides strong empirical evidence on the effectiveness of family firms' governance patterns and business behavior under globalization. Additionally, this study also reveals that managers can learn from the practical experience of family firms to help them confront business crises and gain a sustainable competitive advantage.
Purpose The debate over differences in the behaviors of firms facing globalization is ongoing. This study examines whether globalization impacts the behavior of family firms and if this influence differs between family and non-family firms. Design/methodology/approach Drawing on panel data from the Amadeus database on 62 family firms and 98 non-family firms in Europe, the authors employ panel vector autoregression estimation and the Wald test of Granger causality to verify our conjecture. Additional impulse response functions and the forecast error variance decomposition technique were applied to illustrate complementary shock dynamics. Additionally, the KOF globalization index is used as a proxy for globalization. Findings The results show that globalization visibly impacts family and non-family firms, but the polarity and extent of the effect are different. The authors demonstrate that family firms are in a more favorable position regarding globalization and are less vulnerable to the adverse effects of the globalization process. In contrast, non-family firms fare worse, generating adverse effects. Non-family firms take a more open stance toward globalization than family firms' more conservative behaviors. Research limitations/implications Of course, there are some limitations to the work presented in this paper. On the one hand, the authors’ data span only ten years due to data limitations. This causes the generalizability of the results to be hindered. Therefore, the authors encourage scholars to collect more time series data to increase confidence in the empirical results in future studies. On the other hand, the selection of proxy indicators concerning family firm behavior is mainly focused on financial and employment facets. A multidimensional selection of indicators could make the findings of this study more convincing. Despite its limitations, the study certainly adds to the authors’ understanding of its behavior and globalization activities. Practical implications The authors’ findings have twofold theoretical and practical implications, as they highlight the necessity of developing specific policies aimed at reducing the gap between family and non-family facing globalization and promoting sustainable operations of non-family firms. Although family firms tend to be more frugal and conservative in their overall decision-making, it should be acknowledged that stockholder and stakeholder interest-oriented corporate management policies have made them more capable of steadily improving corporate performance in the sweep of globalization. Social implications To this end, this study deepens the authors’ understanding of the theory of global governance of family firms. It also provides possible paths and directions for future theoretical research on family firms. Globalization affects both family and non-family firms, but our results suggest that family firms are better able to withstand the adverse effects of globalization shocks and adopt efficient governance paths and strategic thinking to gain a competitive advantage. In this regard, the authors encourage non-family firms to actively learn from family firms' operational practices and systems to achieve better adaptability. Originality/value This study provides strong empirical evidence on the effectiveness of family firms' governance patterns and business behavior under globalization. Additionally, this study also reveals that managers can learn from the practical experience of family firms to help them confront business crises and gain a sustainable competitive advantage.
The efficiency of working capital is a major determinant of firm profitability. So, the grasp of working capital dynamics is extremely important for managers, but also for policy makers, since inefficient working capital management is an important source of industrial sickness. This study focuses on the profitability impacts of working capital policies of Turkish agribusinesses, and aims to investigate the potential effects of globalization on these interrelated relationships. The findings obtained from pooled panel analyses demonstrate that Turkish agribusinesses can enhance their profitability and value by adopting a conservative working capital policy through lengthening the cash conversion cycle up to an optimal level. Besides, globalization is found to deteriorate their efficiency and profitability where economic globalization seems to have the highest impact raising questions on the effectiveness of Turkish agribusinesses in coping with competition. Thus, both the managers and the policy makers should concern with the competitiveness impacts of globalization.
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