Manuscript Type: Empirical\ud Research Question/Issue: Considering the recent financial and economic crisis as a unique exogenous shock, our study investigates\ud the financial performance of family-controlled firms in “steady-state” conditions as opposed to situations of severe economic\ud distress. In addition, we focus our attention within family firms in order to tease out the leadership (family or non-family\ud CEO) and family ownership (family ownership concentration or dispersion) conditions that allow some governance arrangements\ud to perform better than others during an economic downturn.\ud Research Findings/Insights: Examining the entire population of Italian industrial family and non-family publicly listed\ud companies over the period 2002–2012, we observe a significantly and consistently better performance of family-controlled firms\ud during the financial and economic crisis, a finding that proves to be robust to several analytical specifications, as well as to\ud different performance measures (ROA, ROE). Then, focusing on family firms only, we find that mixed configurations (family\ud CEOs with relatively lower family ownership concentration) produce better performance in the face of an external hazard.\ud Theoretical/Academic Implications: Our study confirms the pivotal assumption of the socioemotional wealth perspective that\ud the advantages of family firms showup exactly when ownership is at stake. Our results also add to the growing literature on the\ud resilience of family firms, showing that they are more able than others to absorb exogenous shocks.\ud Practitioner/Policy Implications: Our findings suggest the importance of crafting governance structures well in advance of a\ud crisis. Our research speaks to policymakers, indicating the importance of family firms for national economies, and the political\ud opportunity to sustain their growth and managerial development
Research Summary: Building on a unique data set with information on the nuclear structure of entrepreneurial families, we integrate leadership succession into a socioemotional wealth (SEW) logic to test the antecedents and consequences of primogeniture vis-à-vis second-or subsequent-born selection in family firm succession. Our findings suggest that appointing a family firstborn sibling is more likely when there is a high degree of SEW endowment and the family firm has pre-succession performance below aspiration levels. Next, we find that appointing a second-or subsequent-born sibling has a positive and significant effect on post-succession firm profitability, particularly when the firm is in its second generation or later. Managerial Summary: What drives succession choices in family firms? What are the performance implications of each succession choice? These are questions of vital relevance for every business owner. Focusing on the pool of potential family heirs at the time of succession, our study adds to the debate on the drivers of succession choices by suggesting that having a family intensive governance structure fosters primogeniture as the main succession logic, even when the family firm is experiencing lower profitability. Our study informs business owners on the implications of different succession policies, suggesting that family firms that have the courage to disregard primogeniture and choose more wisely the family successor are also the ones experiencing higher post-succession performance. K E Y W O R D Sbirth order, family firms, primogeniture, socioemotional wealth, succession
This paper investigates the association between environmental, social, and governance (ESG) disclosure and company profitability, as measured by return on assets (ROA). We first assess a method to indexing the ESG score of a large sample of U.S. listed companies based on MSCI ESG KLD STATS data from 2000 to 2016. The statistical model is run on 17,358 observations and studies the association of ROA and the three different dimensions of ESG score. Significant differences between industrial firms and financial intermediaries emerge. We find a significant and positive association between ESG and that the environmental awareness in banks is strongly related to profitability, providing implications for policy makers and policy takers.
Internationalization of family businesses is often considered
In this article we offer an empirical test of the critical mass arguments in the discussion of women on corporate boards. The literature in the women on corporate board debate concludes that there must be at least three women on a board before the women really make a difference. These arguments are frequently used in the public debate about the understanding the impact of women on corporate boards, but they have never really been empirically tested on a large sample. In this paper we use a sample of 317 Norwegian firms. Our dependent variable is board strategic involvement. The findings support the critical mass arguments. This study offers useful insights to policy-makers interested in defining legislative measures mandating the presence of women directors in corporate boards by showing that “at least three women” may be particularly beneficial in terms of contribution to board strategic tasks.
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