Behavioural investigation of the impact of different types of CEOs on innovation in family firms: moderating role of ownership divergence between cash flow rights and voting rights

Ghafoor, Sadeen; Wang, Man; Chen, Shihua; Rao, Zhonghao; Zulfiqar, Muhammad

doi:10.1080/1331677x.2021.1985569

Cited by 8 publications

(7 citation statements)

References 80 publications

(90 reference statements)

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“…First, family firms are more frugal and conservative in their overall decision-making. However, stockholders and stakeholder-oriented corporate management policies improve corporate performance in the face of globalization (Ghafoor et al, 2021;Bin-Feng et al, 2021). Accordingly, this study deepens our understanding of the theory of global governance (Cid et al, 2021;Gonz alez-Cruz et al, 2021) and provides possible paths and directions for future theoretical research on family firms.…”

Section: The Effects Of Globalizationmentioning

confidence: 77%

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The effects of globalization on family firms' business model in Europe

Qin

Wang

et al. 2022

IJEBR

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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.

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Section: The Effects Of Globalizationmentioning

confidence: 77%

Section: Conclusion Implications and Limitationsmentioning

confidence: 99%

The effects of globalization on family firms' business model in Europe

Qin

Wang

et al. 2022

IJEBR

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“…Chinese family firms have three types of CEOs: CEOs from family who are controllers; CEOs from outside the family who are not controllers; and CEOs from family who are not controllers. 67,68 Family firms choose the CEO type based on qualification and compensation package. 60,69 Family CEOs possess non-financial objectives that may affect willingness for R&D investment.…”

Section: Ceo Compensation Family Firms Control Diversity and Randd In...mentioning

confidence: 99%

Behavioural Phenomena of Family Firm Control Diversity and R&D Investment with Moderating Role CEO Compensation

Ghafoor¹,

Zulfiqar²,

Wang³

et al. 2023

PRBM

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The novel study describes the behXavioural phenomena of family firm types and explores the relationship between the family firm types of control diversity and Research and Development (R&D) investments. Acquiring controlling rights is a psychological phenomenon for family firm owners. The moderating effect of CEO compensations on R&D investments is investigated. Methodology: We collected data of listed A-share family firms in China from 2011 to 2020 in the China Stock Market and Accounting Research database. We used Tobit regression for data analysis. Results/Finding: The study concludes that lone-controller family firms (LCFFs) are less willing to invest in R&D and multicontroller family firms (MCFFs) have positive behaviour towards R&D. The moderating role of CEO compensation deviates the willingness and behaviour to invest in R&D. Conclusion/Originality:To the best of our knowledge, this study is the first to outline the paradoxical empirical evidence on family firms and R&D investments by analysing control diversity and how the moderating role of CEO compensation nexus can alter willingness towards R&D. The study is a novel attempt following De Massis et al's framework to test the willingness and ability of LCFFs and MCFFs. Previous studies based on agency theory have tacitly assumed that ability and willingness exist in familycontrolled firms. However, this study challenges this implicit assumption.

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“…Chesbrough and Bogers (2014) redefined OI as a distributed and across organizational boundaries innovation process based on purposively managed knowledge flows. The process applies pecuniary and nonpecuniary mechanisms based on the organization's business model (Hidalgo & Palomares, 2021;Ghafoor et al, 2022).…”

Section: The Definition Of Oimentioning

confidence: 99%

Open Innovation: A Research Framework and Case Study of Huawei

Zhang

et al. 2023

Technological and Economic Development of Economy

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Open innovation (OI) has received significant attention from practices and theories over the past decades. This paper investigates the role of OI and personalized patterns in firms at home and abroad, and then measures the risks involved. Firstly, this paper reviews the definition of OI, the business model innovation characteristics, and the facing problems in practice. Based on the existing literature, we illustrate the openness and challenges of business OI. By introducing bibliometrics, this paper presents a whole research framework. Based on keywords cooccurrence analysis and clustering analysis, we locate the current research hotspots and potential research opportunities from a comprehensive perspective. According to the analysis results, five clusters are obtained, including resource management and value creation; collective innovation and form sustainability; innovation management, intellectual property management, and crossborder cooperation; knowledge management and knowledge sharing; innovation ecosystem, big data, and policy-level innovation. Taking Huawei as an example, its typical business OI model is studied from the perspectives of organizational, project-related, marketing and consumer-based, and summaries the facing challenges and risks. We illustrate its financial performance, innovation performance, and development prospects. We found that, during the implementation of OI practical activities and theoretical exploration, the risks and opportunities facing small and medium-sized enterprises (SMEs) are multiple dimensional.

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Behavioural investigation of the impact of different types of CEOs on innovation in family firms: moderating role of ownership divergence between cash flow rights and voting rights

Abstract: Zulfiqar (2021): Behavioural investigation of the impact of different types of CEOs on innovation in family firms: moderating role of ownership divergence between cash flow rights and voting rights,

Cited by 8 publications

References 80 publications

The effects of globalization on family firms' business model in Europe

The effects of globalization on family firms' business model in Europe

Behavioural Phenomena of Family Firm Control Diversity and R&D Investment with Moderating Role CEO Compensation

Open Innovation: A Research Framework and Case Study of Huawei

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