Family ownership and environmental performance: The mediation effect of human resource practices

Abstract

Previous literature has found that listed family firms underperform their nonfamily counterparts in terms of environmental performance, but has not explained why this occurs. We address this research gap by hypothesizing that training and development practices (i.e., managerial practices devoted to providing training and development for the workforce) mediate the relationship between family blockholders and environmental performance. Using a sample of 33,901 firm‐year observations from 2002 to 2016 distributed across 56 countries and employing the structural equation model technique, we find that investment in training and development practices explains almost half of the negative relationship between family blockholders and environmental performance. Our study contributes to the agency theory debate on principal–principal problems by explaining why family blockholders could damage other blockholders and minority shareholders.

The effects of environmental, social and governance disclosure on the cost of capital in small and medium enterprises: The role of family business status

“…On the other hand, for family SMEs, the increase in WACC due to the environmental disclosure is capsized to the extent that they benefit from a reduction in the cost of capital in the same way that large companies do. In contrast with some previous studies, where environmental engagement by family firms may not exhibit a potential effect (Adomako, Amankwah‐Amoah, Danso, Konadu, & Owusu‐Agyei, 2019) or may even result in a lower performance (Dal Maso, Basco, Bassetti, & Lattanzi, 2020), our findings suggest that higher environmental disclosure in family SMEs will reduce the price paid to financiers. This pattern aligns with the view that family firms are more sensitive to environmental strategies (Campopiano & De Massis, 2015), which in turn reduces the probability of being perceived as irresponsible corporate citizens, and avoid potential, devastating, public scandals (Dyer & Whetten, 2006).…”

Family Firms: A Breed of Extremes?

“…Some studies report positive results and exemplary CSR behavior of family firms that are remarkable in their devotion and sacrifice for the community (e.g., Berrone et al, 2010; Dou et al, 2019; Le Breton-Miller & Miller, 2020). Others find extraordinarily negative results and catastrophic examples that have drawn public attention (Dal Maso et al, 2020). Once again, family emotional bonds and discretion may be critical drivers.…”

Environmental performance, sustainability, governance and financial performance: Evidence from heavily polluting industries in China

“…Therefore, and consistent with prior studies (Akbas, 2014(Akbas, , 2016Giannarakis, 2014a;Maso, Basco, Bassetti, & Lattanzi, 2020;Welbeck et al, 2017), we measure FSIZE as the natural log of total assets at the end of fiscal year, whereas FLEVE is measured as the total debt to total assets.…”