Does Family and Lone Founder Involvement Lead to Similar Indebtedness?

Diéguez‐Soto, Julio; López‐Delgado, Pilar

doi:10.1111/jsbm.12422

Cited by 31 publications

(17 citation statements)

References 111 publications

(179 reference statements)

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“…Nevertheless, in this study, fixed-effect estimation is not appropriate given the time-invariant nature of both the moderating variable, i.e., family management, and certain control variables, such as territorial subdivisions and industries dummies [100]. Therefore, following prior research [101,102], it is more pertinent using random-effects models. According to the abovementioned specifications, different models based on the following equation are estimated: Sustainable economic performance = β 0 + β 1 Intramural R&D t-3 + β 2 Extramural R&D t-3 + β 3 Product innovation t-1 + β 4 Process innovation t-1 + β 5 Family involvement in management + β 6 Intramural R&D t-3 x Family involvement in management + β 7 Extramural R&D t-3 x Family involvement in management + β 8 Product innovation t-1 x Family involvement in management + β 9 Process innovation t-1 x Family involvement in management + β j x Controls + ε Table 2 shows the means, the standard deviations and the correlations of the variables under study.…”

Section: Methodsmentioning

confidence: 99%

Examining the Impact of Innovation Forms on Sustainable Economic Performance: The Influence of Family Management

2019

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The aim of this research is to explore the effect that innovation, as a potential source of sustained competitive advantage and firm growth, has on the achievement of sustainable economic performance. In particular, this paper empirically examines the influence of four innovation forms (intramural R&D, extramural R&D, product innovation, and process innovation) on firms’ sustainable economic performance, considering the moderating effect of family involvement in management. To test the hypotheses, random-effects regression analyses are applied to a longitudinal sample of 598 Spanish private manufacturing firms throughout the 2006–2015 period. The results show a negative effect of intramural and extramural R&D on sustainable economic performance and a positive effect of process innovation on sustainable economic performance. Moreover, a reinforced relationship between process innovation and sustainable economic performance is also revealed when family involvement in management acts as a moderator. The findings make several contributions to research and practice.

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Section: Methodsmentioning

confidence: 99%

Examining the Impact of Innovation Forms on Sustainable Economic Performance: The Influence of Family Management

2019

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“…According to the present literature review, researchers [3,39,49] identified two categories of debt financing: internal and external financial sources. According to Chua et al [50], and Hillier et al [51], new ventures of family firms are often debt financing through loaning, asset-liability, and debt-credit.…”

Section: Debt Financingmentioning

confidence: 99%

Does Working Capital Affect Family Firms’ Decision-Making in Laos? Evidence from a Two-Wave Cross-Lagged Approach

Daovisan

Shen

2020

Sustainability

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Family firms are the backbone of the socialist transition to a market-oriented economy in Laos. Working capital is an important area of finance that has not been widely studied in relation to family firms’ decision-making. We hypothesize that working capital has a positive cross-lagged effect on decision-making. The hypotheses were tested on a sample of 779 Laotian family firms from 2016 to 2017 ( t 1 ) and from 2018 to 2019 ( t 2 ) . The analysis was performed using a two-wave cross-lagged model under structural equation modelling. Our results confirm that working capital (access to finance, cash, debt financing, inventory, growth, and profitability) has a positive cross-lagged effect on decision-making. In addition, the findings also suggest that family firms’ early-debt financing could have a vital influence on decision-making. The practical implications of the results are discussed.

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“…Then, the business was featured as a family firm when at least two people with the same surname were involved in the business as shareholders, CEO or board directors (Villalonga and Amit, 2006;Anderson and Reeb 2003;Garc ıa-Castro and Casasola, 2011). Previous studies (Arosa et al, 2010;Garcia-Castro and Casasola, 2011;L opez-Delgado and Di eguez-Soto, 2015;Di eguez-Soto and L opez-Delgado, 2019) that also used a sample with data extracted from SABI database, confirmed the suitability of the former criteria, i.e. the surname coincidence to identify family firms.…”

Section: Data and Variablesmentioning

confidence: 67%

How do Spanish unlisted family firms rebalance their capital structures?

Serrasqueiro

Matias

Diéguez‐Soto

2020

JFBM

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PurposeThis paper seeks to analyze the family firm's capital structure decisions, focusing on the speed of adjustment (SOA) as well as on the effect of distance from the target capital structure on the SOA towards target short-term and long-term debt ratios in unlisted small and medium-sized family firms.Design/methodology/approachMethodologically, we use dynamic panel data estimators to estimate the effects of distance on the speeds of adjustment towards those targets. Data for the period 2006–2014 were collected for two research sub-samples: one sub-sample with 398 family firms; the other sub-sample contains 217 non-family firms.FindingsThe results show that the deviation from the target debt ratios impacts negatively on the speeds of adjustment towards target short-term and long-term debt ratios in unlisted family firms. These results suggest that family firms, deviating from target debt ratios, face deviation costs, i.e. insolvency costs, inferior to the adjustment costs, i.e. transaction costs. Therefore, family firms stay away from the target debt ratios for a long time than do non-family firms.Research limitations/implicationsThe research sample comprises a low number of family firms, therefore for future research we suggest increasing the size of the sample of family firms to get a deeper understanding of family firms' SOA towards capital structure. Additionally, we suggest the analysis of other potential determinants of the speed of adjustment towards target capital structure.Practical implicationsThe results obtained suggest that the distance from the target short-term and long-term debt ratios can be avoided if these firms do not depend almost exclusively on internal finance to adjust towards target capital structure. Moreover, for policymakers, we suggest the creation/promotion of alternative external finance sources, allowing reduced transaction costs that contribute to a faster adjustment of small family firms towards target capital structure.Originality/valueThe most previous research focusing on capital structure decisions have focused on listed family firms. To fill this gap, this study examines the speed of adjustment towards target debt ratios in the context of unlisted family firms. Moreover, transaction costs are a function of debt maturity, therefore this study examines separately the speeds of adjustment towards target short-term and long-term debt ratios. This paper shows that the adjustment costs (i.e. transaction costs) could hold back family firms from rebalancing its capital structure.

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Does Family and Lone Founder Involvement Lead to Similar Indebtedness?

Cited by 31 publications

References 111 publications

Examining the Impact of Innovation Forms on Sustainable Economic Performance: The Influence of Family Management

Examining the Impact of Innovation Forms on Sustainable Economic Performance: The Influence of Family Management

Does Working Capital Affect Family Firms’ Decision-Making in Laos? Evidence from a Two-Wave Cross-Lagged Approach

How do Spanish unlisted family firms rebalance their capital structures?

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