2019
DOI: 10.1002/cjas.1540
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Value creation in privately held family businesses: The moderating role of socioemotional wealth

Abstract: This article examines value creation (VC) in the context of privately held family businesses using a value‐based management approach. Namely, this paper assesses the influence of five value drivers (operating profit margin, sales growth, income tax rate, investment rate, and leverage) on the VC of family firms, considering the moderating effect of socioemotional wealth (SEW). Evidence from a sample of 188 Spanish family firms indicates a positive moderating effect of SEW on the relationship between operating p… Show more

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Cited by 21 publications
(22 citation statements)
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“…In this vein, these findings are consistent with prior studies [31,84,107], which stated that although R&D investments are carried out with the purpose of obtaining innovation outputs and, therefore, enhancing firm performance, they imply substantial investments in sunk costs due to their expenditure nature [108,109]. Thus, the results support that R&D expenses, as an investment decision, reduce the firms' operating result, and thereby, the performance outcomes, because of the decrease in cash flow at the time of investment [47,48,50].…”
Section: Discussionsupporting
confidence: 91%
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“…In this vein, these findings are consistent with prior studies [31,84,107], which stated that although R&D investments are carried out with the purpose of obtaining innovation outputs and, therefore, enhancing firm performance, they imply substantial investments in sunk costs due to their expenditure nature [108,109]. Thus, the results support that R&D expenses, as an investment decision, reduce the firms' operating result, and thereby, the performance outcomes, because of the decrease in cash flow at the time of investment [47,48,50].…”
Section: Discussionsupporting
confidence: 91%
“…Namely, innovation investments are developed with the final goal of achieving innovation outputs, and thus increasing economic outcomes. However, when intramural and extramural R&D expenses are carried out, the firms' potential operating result will be reduced [47,48], and thus the economic performance will be also diminished [49,50]. That is, as R&D expenses increase, the lower will be the firm profitability.…”
Section: Innovation Inputsmentioning
confidence: 99%
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“…As indicated by Martínez-Romero (2018) and Vandekerkhof et al (2015), based on Brambor et al (2006), in an interactive model, the effect of any independent variable ( X ) on the dependent variable ( Y ) is not any single constant. The mentioned effect is contingent upon the coefficients ( β s) of X and of the interaction term XM , as well as on the value of the moderator ( M ).…”
Section: Methodsmentioning
confidence: 99%
“…Management plays an important role in corporate decision making for the benefits of shareholders [6,7]. Its foremost goal is to maximize the value of the firm and increase the market value of its stock [8,9]. In general, managers appear to firmly believe that the market values companies with a stable dividend policy [10].…”
Section: Introductionmentioning
confidence: 99%