Purpose
The purpose of this paper is to provide a better assessment of the positive impact of family influence (FI) on the performance of SMEs and investigate a possible shift with firm size (FS) and age.
Design/methodology/approach
This study is based upon a large sample of 4,240 firms representative of small businesses operating in the USA. It focuses on active ownership, i.e. direct involvement of owners alongside employees as an important factor of FI and conducts hierarchical regression models with profitability as the dependent variable, FI as the independent variable, and FS/age as moderating variables. It also includes other firm characteristics as control variables.
Findings
The results show that even though active family ownership is positively associated with the profitability of SMEs, the relationship between FI and profitability is negatively moderated by FS and firm age (FA).
Research limitations/implications
The limitations of this study are mainly related to the definition of family SMEs and to the cross-sectional data used to understand the variations in economic performance. However, the results show the great importance of this kind of study; more attention must be paid to heterogeneity due to the size and age of family businesses as well as the level of owners’ involvement alongside employees.
Practical implications
Practitioners are encouraged to maintain a higher degree of family ownership combined with a higher degree of active ownership in the initial stages, when family businesses are young and small. However, the level of active ownership should be reduced when family businesses increase in age and size. According to this study, practitioners should open up businesses to external human resources other than the owners’ family as the firm increases in size/age to avoid the risks associated with family members lacking talent and/or expropriating benefits.
Originality/value
This study is one of the first to give evidence on not only a direct (and positive) relationship between FI and economic performance, but also an indirect (and negative) moderating effect of FS and FA on this relationship.
This paper analyses the new role of market‐maker of last resort openly assumed by central banks since the 2008 financial crisis revealed the increasing impact of noninterest‐income activities on banks' balance sheets. A brief review of the distinction between conventional and unconventional monetary policies shows that the inflexion point from lender of last resort to market‐maker of last resort is given by the extension of central bank intervention to other markets than the bank reserves markets. Herein, it is explained how the market‐maker of last resort role is as counterproductive as its predecessor in putting the economy back on track. We show that the main problem of both conventional and unconventional monetary policies is that they distort price signals, particularly asset prices, in their attempt to reignite economic growth. Instead of correcting cyclical fluctuations, the policies of the market‐maker of last resort prevent the cyclical divergences between financial and goods sectors from readjusting.
What is the precise nature of entrepreneurial action in economic and business analyses? Moreover, what is the relationship between the entrepreneur’s action and the socio-institutional environment where this action takes place? The difficulty in specifying the nature of the entrepreneurial act and its interaction with the socio-institutional environment is to be found in the lack of development of an actual theory of action, in which entrepreneurship can be contextualised. This article aims at the delineation of a socially situated action theory to be used in the analysis of entrepreneurship. One of the main results of using the action theory developed in this study is that entrepreneurial action is defined by its institutional autonomy within society. This leads to the conclusion that entrepreneurial action is a tridimensional praxeological phenomenon, which integrates profit-seeking, uncertainty-bearing and ultimate power of decision-making in the one person of the acting entrepreneur.
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