Ownership concentration,contestability, family firms,and capital structure

This study analyses the distribution of power among the several blockholders of a firm and the identity of those blockholders as a determinant of firm leverage. Using a sample of 694 firms from 12 Western European countries, our results support a negative relationship between ownership concentration in the hands of the main blockholder and firm leverage. Moreover, we detect that the presence of a second and third large shareholder (beyond the first blockholder) has a significant positive effect on the leverage ratio. In addition, the results show that contestability in family firms plays a more relevant role. Finally, we show that family firms do have significant impact on firm leverage level, and this impact varies depending on the legal framework and institutional environment. In our main sample the results show family firms negatively affect market leverage, supporting the theory that family firms are more averse to an increase in the debt level due to the risk of bankruptcy and financial distress as a result of having an under-diversified portfolio. In contrast, the opposite effect is found in the sample that excludes the United Kingdom. This last result cannot be explained by agency theory, given that family businesses are those that suffer less from Type I agency problems. This result suggests either some difficulty in financing their investments by issuing new equity or the need to use debt as a signal of the quality of its investments. Our results prove to be stable against a battery of robustness tests.     

资本结构、股权结构、成长机会与公司绩效

本文在代理成本理论的架构下,以公司成长机会为背景,分析了资本结构和股权结构对公司绩效的影响,并利用 1998 年年底之前在上海和深圳两个交易所上市的 498 家上市公司 1999 至 2001 年三年间1494 个观察值为样本进行了实证分析。结果表明,对于不同成长性的公司而言, 资本结构和股权结构对公司绩效的影响存在较大差异,从而为我们选择理想的资本结构和股权结构提供了有益的启示。     

对企业实行债转股的思考

启动财务杠杆给企业带来的效益一直是理论界关注的焦点.本文所介绍的是在西方较为流行的两种对启动财务杠杆实行馈转股的企业进行效益分析的理论模型.第—种模型强调资本成本在债转股中的重要性,认为企业制订是否实行债转股的决策依据就是对企业破产成本,委托代理成本和无形资产成本的评估.而对投资者来说,在投资中选择持债还是持股也依据他们对委托代理成本和无形资产的评估.第二种模型则建议企业在启动资本杠杆实行债转股中注重对风险的规避. 对于中国国有企业实行的债转股,本文以为它在所有制、市场条件及社会经济制度背景等方面具有完全不同的性质.但我们仍可以利用财务杠杆的工作原理将国有企业的债务转为股份公开上市交易,以实行中国国有企业的民营化,减轻企业的债务负担,同时减少国有银行的呆坏帐.     

Ambidexterity in family firms: The interplay between family influences within and beyond the executive suite

Ambidexterity commonly refers to the simultaneous pursuit of exploration and exploitation and may be particularly beneficial for family firms. In this study, we investigate how family CEO and top management team (TMT) family affiliation influence ambidexterity. In addition, we consider the role of family ownership dispersion and how it impacts the ability of the top managers of family firms to foster ambidexterity. We test our hypotheses on a unique dataset combining archival and multiple respondent survey data of 167 German family firms. Our results shed light on conditions under which family-led leadership can pursue ambidexterity.     

The internationalization of small and medium-sized enterprises: the effect of family management, human capital and foreign ownership

Research on factors affecting the internationalization of SMEs is attracting growing interest. However, only a limited number of empirical analyses have explored the question of if and to what extent the family character of the firm has an effect on internationalization decisions. Relying on data from a sample of 1,324 Italian manufacturing SMEs, this paper shows that involvement of the owning family in management negatively influences export propensity but, once the choice to go international has been made, both the degree of internationalization and geographical scope in family-managed firms are not significantly different from nonfamily-managed firms. Empirical results also show that the level of human capital and the presence of foreign shareholders in the SMEs positively influence internationalization. Innovation propensity, size, and age of the firm as well as industry characteristics are included in the analysis as control variables.     

Internal corporate governance mechanisms as drivers of firm value: panel data evidence for Chilean firms

The paper analyses to what extent ownership structure, capital structure, and dividend policy as corporate governance mechanisms drive the firm value. From a data panel of publicly quoted Chilean firms for the years 2002–2010, we find that there is an inverse U-shaped relationship between ownership concentration and firm value. The positive slope is supported by the supervision hypothesis; whilst the negative relation between ownership concentration and firm value is supported by the expropriation hypothesis. We also find that there is a positive impact of both leverage and the dividend pay-out on the firm value. In this case, these two mechanisms reduce the free cash flows which otherwise might be used opportunistically by managers in their own interests (free rider problem). Contrary to the previous empirical literature in Chile, it is found that the mere fact that a firm is affiliated to a business group/conglomerate impacts positively its value. This positive effect is basically driven by the development of intragroup capital markets, and the governance imposed by the rules of the conglomerate.     

The Bind that Ties: Socioemotional Wealth Preservation in Family Firms

A growing body of research shows that family firms are different from other organizations in significant ways. In this paper we review this literature by examining how family firms differ from nonfamily firms along five broad categories of managerial decisions. These categories encompass a set of key organizational choices concerning management processes, firm strategies, corporate governance, stakeholder relations and business venturing. We argue that socioemotional wealth or affective endowment of family owners explain many of these choices. We also examine some contingency factors (namely family stage, firm size, firm hazard, and the presence of nonfamily shareholders) that moderate the influence of socioemotional wealth preservation as a point of reference when making managerial decisions in family firms. Lastly, we explore the firm performance consequences of family ownership.     

Does family matter? Ownership,motives and firms’ environmental strategy

Extant research has primarily focused on the economic drivers and outcomes of corporate environmental performance. This trajectory oversimplifies the motives for environmental strategies across all firm types and particularly overlooks how firm ownership presents other motives for environmental strategies. In this study, we leverage institutional theory to examine how family motives, underpinned by family members' desire to gain or preserve family legitimacy and socio-emotional wealth, affect ISO 14001 certification. Using firm-level data, we find that family ownership has a positive effect on ISO 14001 certification. This effect is stronger for firms whose names include the family name and also for firms located closer to large cities. Our study contributes to nonmarket strategy literature by showing that family motives underpin firms’ environmental initiatives. It also contributes to institutional theory by delineating the levels of legitimacy that spur nonmarket strategy in family firms.     

“Privacy please!” The public to private decision in Germany

This paper examines the characteristics and motives of German public to private transactions (PTPs) between 1996 and 2004. We empirically test hypotheses regarding free cash flow, leverage potential, ownership concentration, a stock market quotation’s decreasing benefits, limited capital market efficiency, and dividends. The results illustrate that, in the relevant period, the going private companies originated from mature industries and that, in the three financial years preceding the PTP transaction, their sales figures showed slow growth. Furthermore, the capital structure had potential for further leveraging and the companies were marked by low profitability. Trading in the PTPs’ shares was very sluggish, which limited the efficiency of the capital markets. Ultimately, we do not find evidence supporting the free cash flow hypothesis regarding German firms.     

Ownership structure,investors’ protection and corporate valuation: the effect of judicial system efficiency in family and non-family firms

Research on the effect of ownership structure on firm performance shows no convergent evidence concerning the sign and form of the above-mentioned relationship. Similarly, there is no homogeneous evidence documenting family ownership concentration is always positively or negatively correlated with firm value, or irrelevant. This paper analyses whether and how the de facto investor protection provided by the judicial system affects the relationship between corporate performance and ownership structure in 1314 firms operating in four European countries (Germany, France, Italy, and Spain) over a five-year period, 2010–2014. Moreover, we analyse whether judicial system efficiency influences if and how family firms in the controlling coalition collude for expropriating minority shareholders. Our findings show that the level of shareholder protection, derived from judicial efficiency, is relevant to the relationship between ownership structure and firm performance, thus corroborating literature in that institutional contexts matter in explaining such relations. The results suggest the need for more efficient external mechanisms of corporate governance to facilitate investment in equity capital, thus decreasing the country risk perceived by investors.     

The role of internal social capital in organisational innovation. An empirical study of family firms

Using a sample of 172 Spanish family firms and two responders per firm, consisting of a family member and a non-family member (344 returned questionnaires), we examine the effects of internal social capital on organisational innovation. Building on the relational, cognitive, and structural view, and on social capital theory, we propose that internal networking relationships between family members (family social capital) and between non-family members (non-family social capital) in family firms facilitates innovation. Moreover, its benefits flow from the relationships among the firm's internal groups. The results of structural equation models indicate that the social capital of both family members and non-family members has a direct and positive effect on innovation. Further, our findings provide evidence that non-family social capital is just as effective as family social capital for family firm innovation, establishing a new line of research from an empirical perspective. The findings also test whether social factors are key assets of family firm innovation.     

Leveraging tacit knowledge in alliances: The importance of using relational capabilities to build and leverage relational capital

Effectively managing existing tacit knowledge stocks and transferring knowledge between partners contributes to firm capabilities that allow them to differentiate their goods and services from those of their competitors. Because it also helps them to provide greater value to customers, it contributes to the development of a competitive advantage. In highly competitive industries, firms need to focus on proactively managing their knowledge resources to ensure survival. However, the knowledge management process is at times complex especially because of the difficulty involved in conveying tacit knowledge. Due to its latent potential for enabling firms to achieve potential competitive advantage, how firms utilize and transfer stocks of tacit knowledge requires enhanced understanding. In specific, we explain how firms use relational capabilities to build relational capital with partners. In turn, relational capital facilitates the transfer of tacit knowledge between collaborating partners. We develop several propositions regarding the factors likely to influence the transfer of a firm's tacit knowledge resources in strategic alliances. The importance of social capital's relational dimension, relational capital, in this process is highlighted.     

经济金融化与资本结构动态调整

通过构建包含厂商、家庭和银行的AD-AS产品市场均衡模型, 本文推导得到企业目标资本结构的测算方程.在此基础上, 以金融渠道获利作为经济金融化的度量指标, 基于2007年～2015年中国非金融类上市公司半年期数据, 系统考察了经济金融化对资本结构调整速度及其偏离度的影响.实证结果显示, 经济金融化程度越高, 企业资本结构偏离度越大且调整速度越慢, 尤其在非国有企业、过度负债企业和小规模企业更为凸显, 即存在非对称效应.此外, 本文还发现经济金融化显著抑制固定资产投资, 投资偏好改变及抵押担保能力下降有助于理解其对资本结构动态调整的负向作用.可见, 基于金融渠道的获利模式促使企业形成对高杠杆率的路径依赖, 加剧实际资本结构与目标值的偏离度, 从而不利于宏观去杠杆及供给侧结构性改革.     

When labor representatives join supervisory boards: empirical evidence of the relationship between the change to parity codetermination and working capital and operating cash flows

We examine how the change to 50% labor representation on German supervisory boards is related to working capital and operating cash flows, since both are proxies for short-term financial policies. We expect the change to be associated with reduced working capital and increased operating cash flows. Using a difference-in-differences model, we compare a sample of listed and non-listed firms that changed to parity codetermination between 1987 and 2014 with two different groups of control firms that did not change their level of codetermination. In line with our hypotheses, the results suggest that a change to parity codetermination is related to lower working capital and higher operating cash flows compared to our control firms. We conclude that firms begin to engage in more efficient working capital management due to the change to parity codetermination on supervisory boards. We also conclude that the positive short-term effects on the firms’ operating performance imply that labor representatives do not bear just the interests of employees in mind, but also those of other stakeholders.     

Innovationsverhalten in Familienunternehmen

Family businesses are publicly believed to be highly innovative and to be the “Hidden Champions” of the German industry. In recent times scholars have begun to examine this thesis and have come to starkly opposing results. On the one hand family businesses are attested to have a special ?entrepreneurial “spirit” which makes them highly innovative. On the other hand the lack of separation of ownership and control and insufficient diversification of family-investors are said to lead to less innovation activity. In this study we investigate the innovation activity of 384 German manufacturing firms differing in legal structure, size, age, industry, and—most importantly—in the degree of family ownership, family management and family control. The results of our analysis reveals differentiated results. Fundamentally, family ownership and family management are detrimental to firm innovation, at the same time family control has a positive impact on innovation activities. Our Results point to the fact that owner-managed businesses tend to innovate less due to risk aversion while a focus on controlling instead of managing a corporation by the owning family lead to an increase in innovations.     

The Board Value Protection Function in Young,Mature and Family Firms

Next to value creation, the value protection function of the Board of Directors is a widely accepted fact. Nevertheless, the current literature struggles to show a positive impact of the Board Value Protection (BVP) on firm performance. We use the decision rights model of board functions and argue the difference between board member roles (insider vs independent) and functions, to isolate the BVP from other director functions. By using the German context as a natural setting, we can isolate the BVP and show how it evolves with the firm lifecycle and owner motivations. Based on a sample of 446 initial public offerings (IPOs) from 1995 to 2015, our results show that the importance of BVP in young firms decreases with age, increases in mature firms and that this effect is stronger in family firms.     

Emotionally intelligent top management and high family firm performance: Evidence from Germany

Executives in family firms are often confronted with emotionally loaded issues, in part due to the need to include the interests of the owning family. Given this context, we hypothesize how high family-firm performance is affected by the emotional intelligence (EI) of a family-based CEO and top-management team (TMT), in addition to the CEO's transformational leadership (TFL) and TMT's behavioral integration. Survey measures were taken from a random sample of 72 CEOs of German family firms and 245 members of their TMTs. We found that TMT behavioral integration mediates between CEO TFL and objective firm performance while CEO EI is significantly related to both CEO TFL and TMT EI. Implications are discussed for future research thereby suggesting an extension to upper-echelon theory.     

The impact of corporate social performance on the cost of debt and access to debt financing for listed European non-financial firms

This study addresses the controversial issue of how non-financial performance affects the cost of debt capital and access to it. The relationship between corporate social performance and two measures of debt cost (accounting-based and market-based) and the measure of debt access are analysed by means of a multi-theoretical framework combining economics with social theories. By observing a sample of listed European non-financial firms over an 8-year period from 2005 to 2012, we find a negative relationship between corporate social performance and interest rate. Consistent with this result, we find a positive relationship between corporate social performance and debt rating. Thus, corporate social performance has a positive role in reducing the cost of debt capital. Moreover, firms with better corporate social performance are more attractive to lenders in terms of leverage allowance. Overall, our findings provide deeper insight into the reasons why companies should improve their corporate social performance.     

Internationalization of family firms: the effect of ownership and governance

Despite family firm’s dominant role in economies worldwide, there is little empirical knowledge on their internationalization. Drawing on a sample of Austrian firms, this paper investigates the impact of family influence and various governance factors on internationalization. The findings reveal an inverted U-shaped relationship between family influence and internationalization. Family firms with medium family influence are the most internationally active companies. This indicates that concerning internationalization the advantages of being a family firm are highest when the family’s ownership share and involvement in management and governance boards is not too extensive. Additionally, neither the incumbent generation, nor the level of non-family executives in the management board, nor the existence of a supervisory board has a significant influence on going international. Since advisory boards seem to foster internationalization, they might be an adjuvant means of equipping family firms with the necessary capabilities, know-how and contacts to operate internationally.     

Casting a Wide Net for Innovation: Mediating Effect of R&D Human and Social Capital to Unlock the Value from Alliance Portfolio Diversity

This paper examines the performance effects associated with different alliance portfolio configurations in terms of geographical location and partner type. Based on these distinctions, the authors hypothesize that more diverse alliance portfolios enable firms to gain and exploit innovation opportunities. Additionally, the mediating effects of R&D human and social capital on the R&D alliance portfolio diversity–innovation performance relationship are explored. The authors reason that the absorptive capacity of R&D intellectual capital determines a firm's potential gains from highly diverse alliance portfolios. From panel data of manufacturing firms in Spain for the period 2008–2013, the results confirm the inverted U‐shaped relationship between alliance portfolio diversity and firm innovation performance, implying that both insufficient and excessive alliance portfolio diversity may be detrimental to firm innovativeness. Additionally, R&D human and social capital partially mediates the R&D alliance diversity–innovation performance relationship, emphasizing the importance of internal capabilities to leverage the benefits of highly diverse alliance portfolios. These findings add a dynamic dimension to the conceptualization of alliance portfolios and how firms create value by balancing explorative and exploitative alliances.