Founding‐Family Ownership, Corporate Diversification, and Firm Leverage

Anderson, Ronald C.; Reeb, David M.

doi:10.1086/377115

Cited by 548 publications

(619 citation statements)

References 40 publications

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“…Carney, van Essen, Gedajlovic, and Heugens [58] also find that reliance on debt of first generation private family firms harms their performance, and in successive generation family firms become more averse to acquiring debt. Among the most important reasons for abstaining from debt is the effect it can have on diminishing family control [59], compromising long-term investments [60], and the possibility that debt can exacerbate family conflict [18]. In order to further research the effect these strategies have on Mexican family firms, this study attempts to examine performance in both family and non-family firms, introducing debt into the equation in order to observe differences between firms.…”

Section: Debtmentioning

confidence: 99%

Effects of Family Ownership, Debt and Board Composition on Mexican Firms Performance

Martín-Reyna

Durán-Encalada

2015

IJFS

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This study examines the relationship between ownership structure and performance of public firms in Mexico, considering debt and the structure of the board of directors as contextual and institutional factors. This research seeks to explain the mixed results about the relationship of ownership and performance presented by other relevant studies in family and non-family businesses, mainly in emerging countries. The results confirm the positive association between family ownership concentration and performance, calculated by Tobin's Q, showing how the participation of inside shareholders on the board and a low debt level contribute to higher performance. However, the association of these variables with performance shows a contrasting effect in the case of family as compared to non-family businesses. The particular corporate legal context in Mexico could be highlighted as one of the main reasons for these results.

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Section: Debtmentioning

confidence: 99%

Effects of Family Ownership, Debt and Board Composition on Mexican Firms Performance

Martín-Reyna

Durán-Encalada

2015

IJFS

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“…Anderson and Reeb (2003) test whether large US firms founded by families reduce risk through diversification and gearing adjustments, but actually find not only lower diversification levels, but similar gearing levels to other firms. Jahera and Lloyd (1996) also found that there is a negative relationship between research and development expenditure and gearing, where debt is measured at its book value and equity at its market value.…”

Section: Literature Reviewmentioning

confidence: 94%

Target gearing in the UK: a triangulated approach

Tucker

Pointon

Olugbode

2010

Int J of Managerial Finance

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PurposeThe purpose of this study is to investigate the incidence of target gearing behaviour in firms as well as the drivers of such behaviour.Design/methodology/approachThe paper employs a triangulation approach across three methodological phases: a questionnaire survey, logistic regression modelling of firm data, and interviews with finance directors. The results are then discussed under the key themes of gearing optimality, valuation issues, external drivers, the finance life‐cycle, the impact of risk, and the relationship between gearing and corporate strategy.FindingsThe results reveal that the majority of firms engage in targeting, though targets are subject to fairly frequent revision as both external and internal drivers evolve. Important external drivers include macroeconomic variables and analysts' views, whereas important internal drivers include income gearing and profitability.Practical implicationsGiven the range and variety of drivers, target gearing evidently represents a complex strategic decision for finance directors. The paper provides a benchmark perspective for finance directors when determining their firm's gearing strategy.Originality/valueThe innovation of the paper is the study of target gearing across three methods, the results of which are then triangulated to provide a deeper understanding of both the quantifiable and qualitative drivers of gearing. This provides a far broader insight into the real‐world determination of gearing strategy than a conventional empirical approach.

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“…In the USA, although blockholdership is limited in publicly traded firms by law, family owners can still exert influence on firm strategy and behaviour (Anderson and Reeb, 2003b;Amit, 2006a, 2006b). At low-to-moderate levels of family ownership, firm strategies and behaviours may resemble those of a non-family firm and economic goals may be more important .…”

Section: Family Ownership and Internationalisationmentioning

confidence: 99%

“…Consistent with previous studies investigating publicly traded family firms, the sample came from firms listed in the S&P 500 (e.g. Anderson and Reeb, 2003a, 2003b, 2004Short et al, 2009). Missing data lowered the sample size to 386.…”

Section: Family's Involvement In Management and The Board And Internamentioning

confidence: 99%

Internationalisation of publicly traded family firms: a transaction cost theory perspective and longitudinal analysis

Memili

Misra

Chrisman

et al. 2017

IJMED

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There has been a prominent stream of research investigating internationalisation of organisations. While the importance of transaction costs in the governance decisions of firms has been well established in the literature, transaction cost theory (TCT) in family firms remains underutilised. We examine the impact of family governance (i.e. family ownership and involvement in management and the board of directors) on internationalisation within the domain of TCT using 386 S&P 500 firms. Our findings indicate an inverted U-shaped relationship between family ownership and internationalisation and a U-shaped relationship between family's involvement in management and the board and internationalisation. This illustrates the interesting differential impact of the components of family involvement on internationalisation. We conclude by discussing future research and implications for practice.Keywords: family firms; family management; family ownership; internationalisation; transaction cost theory.Reference to this paper should be made as follows: Memili, E., Misra, K., Chrisman, J.J. and Welsh, D.H.B. (2017) 'Internationalisation of publicly traded family firms: a transaction cost theory perspective and longitudinal analysis', Int.

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Founding‐Family Ownership, Corporate Diversification, and Firm Leverage

Cited by 548 publications

References 40 publications

Effects of Family Ownership, Debt and Board Composition on Mexican Firms Performance

Effects of Family Ownership, Debt and Board Composition on Mexican Firms Performance

Target gearing in the UK: a triangulated approach

Internationalisation of publicly traded family firms: a transaction cost theory perspective and longitudinal analysis

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