scholarly journals Financial Wealth, Socioemotional Wealth, and IPO Underpricing in Family Firms: A Two-stage Gamble Model

2018 ◽  
Vol 61 (3) ◽  
pp. 1073-1099 ◽  
Author(s):  
Josip Kotlar ◽  
Andrea Signori ◽  
Alfredo De Massis ◽  
Silvio Vismara
Keyword(s):  
Family Firms ◽  
Socioemotional Wealth ◽  
Ipo Underpricing ◽  
Two Stage ◽  
Financial Wealth

In the Horns of the Dilemma: Socioemotional Wealth, Financial Wealth, and Acquisitions in Family Firms

2015 ◽  
Vol 44 (4) ◽  
pp. 1369-1397 ◽  
Author(s):  
Luis R. Gomez-Mejia ◽  
Pankaj C. Patel ◽  
Thomas M. Zellweger
Keyword(s):  
Decision Making ◽  
Family Firms ◽  
Strategic Decision ◽  
Strategic Decision Making ◽  
Socioemotional Wealth ◽  
Family Control ◽  
Financial Wealth ◽  
Empirical Results ◽  
Problem Framing ◽  
Firm Owners

We posit that family firms often face a dilemma in their strategic decision making: whether to maintain current socioemotional wealth or pursue prospective financial wealth. Applying such a mixed gamble perspective to acquisitions, family owners assess potential acquisitions with regard to their impact on both wealth dimensions. In line with this reasoning, our results show that family control implies a general reluctance to acquire and, when an acquisition happens, a preference for related targets. Because financial and socioemotional viewpoints lead to largely incompatible predictions about the occurrence and relatedness of acquisitions, family firm owners use their firm’s vulnerability as a signal. Increased vulnerability leads to a heightened propensity to prioritize financial over socioemotional wealth problem framing, which is reflected in the acquisition of unrelated targets. Empirical results are supportive of these predictions.

Socioemotional wealth and IPO underpricing of family firms

2014 ◽  
Vol 35 (5) ◽  
pp. 751-760 ◽  
Author(s):  
Max P. Leitterstorf ◽  
Sabine B. Rau
Keyword(s):  
Family Firms ◽  
Socioemotional Wealth ◽  
Ipo Underpricing

Socioemotional wealth and performance in private family firms

2019 ◽  
Vol 9 (4) ◽  
pp. 468-496 ◽  
Author(s):  
Mohammad Rezaur Razzak ◽  
Suaad Jassem
Keyword(s):  
Firm Performance ◽  
Family Firms ◽  
Family Firm ◽  
Emotional Attachment ◽  
Socioemotional Wealth ◽  
Content Type ◽  
Family Control ◽  
Financial Wealth ◽  
Family Commitment ◽  
Dynastic Succession

Purpose Although family business literature acknowledges that family firms owners are motivated by a set of socioemotional wealth (SEW) goals along with firm-centric business goals, yet a consistently predictable pattern of relationship between SEW and financial wealth is yet to be discerned. The purpose of this paper is to propose a theoretical model based on the stakeholder approach to suggest that family commitment mediates the association between the dimensions of SEW and firm performance. Design/methodology/approach A set of hypotheses are proposed that are tested using structural equation modeling with data collected from 357 medium to large sized privately held family firms in Bangladesh. The data analysis is done with SmartPLS (v.3.2). Findings The results indicate that family commitment partially mediates the relationships between family control and influence, family identification, emotional attachment and renewal of family bonds through dynastic succession and firm performance. The only non-significant relationship was between binding social ties and firm performance. The results provide a more nuanced understanding of the link between SEW goals and firm performance, and present important implications for theory and practice. Research limitations/implications The cross-sectional nature of the study exposes it to the specter of common method bias despite the fact that procedural remedies were initiated to minimize the impact of such occurrence. A longitudinal study with data obtained from multiple individuals at different levels of the organization would possibly yield more robust findings. Furthermore, in the absence of a multi-country and multi-sector analysis, a broad generalization of the findings may not be feasible. Practical implications The knowledge that family identity, emotional attachment and renewal of family bonds through dynastic succession may be leveraged to enhance the commitment of subsequent generation of family firm owners to the firm that may be pertinent to incumbents who desire to see their successors more engaged in the family enterprise. Furthermore, knowing that excessive focus on family control over the firm leads to negative outcomes is also pertinent to family firm leaders. Social implications Survival of family businesses is vital to the global economy as one of the primary drivers of global GDP growth and source of new employment. Policy makers can benefit from the findings of this study to customize policies that take into cognizance the importance of SEW owners of family firms and the fact that some of these SEW goals actually benefit the firm in terms of enhanced commitment to the enterprise and consequently superior firm performance. Originality/value The role of family commitment as a mediator between SEW and firm performance has not been dominant in the literature. By providing a finer-grained understanding of how family commitment accounts for the relationship between family-centric non-economic goals such as SEW and firm-centric goals such as business performance, the study presents a theoretical link between sociomemotional wealth and financial wealth in the context of private family firms.

The Internationalization of Family Firms

2013 ◽  
Vol 27 (2) ◽  
pp. 103-125 ◽  
Author(s):  
Thilo J. Pukall ◽  
Andrea Calabrò
Keyword(s):  
Theoretical Model ◽  
Family Firms ◽  
Future Research ◽  
Risk Attitudes ◽  
Journal Articles ◽  
Suggested Model ◽  
Socioemotional Wealth ◽  
Uppsala Model ◽  
Research Themes

This article systematically reviews and critically examines 72 journal articles published (from 1980 to 2012) on the internationalization of family firms. Stemming from existing literature, core aspects and main gaps are identified. We aim to overcome the inconclusiveness of findings of previous research by offering an integrative theoretical model integrating the concept of socioemotional wealth with the revised Uppsala model. Our framework helps understand behaviors of internationalizing family firms by focusing on when and how they internationalize, especially related to risk attitudes, the role of knowledge and networks. Ultimately, we provide future research themes flowing from our suggested model.

Family Ownership Goals and Socioemotional Wealth: Evidence from Finnish Family Firms

2018 ◽  
Vol 26 (02) ◽  
pp. 207-224 ◽  
Author(s):  
Mariateresa Torchia ◽  
Marita Rautiainen ◽  
Andrea Calabrò ◽  
Tuuli Ikäheimonen ◽  
Timo Pihkala ◽  
...  
Keyword(s):  
Survey Data ◽  
Goal Setting ◽  
Family Firms ◽  
Family Ownership ◽  
Socioemotional Wealth ◽  
Ownership Status ◽  
Impact On Family

By focusing on family owners’ perceptions and dynamics the aim of this paper is to understand the specific goals associated to their ownership status and whether and to what extend they impact on family firms’ growth and continuity. We use survey data on Finnish family firms and identify a set of differentiated family owners’ goals. Our findings contribute to the debate on differentiating socioemotional wealth by untangling the existence of variations in family principals’ goal setting and the importance to also consider that financial motives could determine family owners’ goals.

scholarly journals How Does Family Involvement Affect Environmental Innovation? A Socioemotional Wealth Perspective

2021 ◽  
Vol 13 (23) ◽  
pp. 13114
Author(s):  
Joohee Han ◽  
Juil Lee ◽  
Sang-Joon Kim
Keyword(s):  
Family Involvement ◽  
Environmental Performance ◽  
Boards Of Directors ◽  
Family Firms ◽  
Technological Development ◽  
Environmental Issues ◽  
Environmental Innovation ◽  
Socioemotional Wealth ◽  
Public Firms ◽  
Positive Effect

The purpose of this study was to examine how family involvement affects the environmental innovation of firms. While prior studies have shown that family involvement can enhance environmental performance, these environmental performances have been portrayed as firm activities to prevent environmental issues, such as air pollution, CO2 emissions, etc. We maintain that environmental performance should be more proactive and enable firms to transform their activities more fundamentally towards environmental protection. In this sense, we consider environmental innovation, i.e., technological development to address environmental issues, as a proactive measure enacting firm activities to address environmental issues. Furthermore, we determine whether and how family involvement can motivate firms to develop technologies for environmental performance. To illuminate this relation, we utilized a socioemotional wealth perspective, which provides useful insights into how family-controlled firms behave differently in comparison to non-family firms. Building on this socioemotional wealth approach, we suggest that family involvement helps firms engage in environmental innovation. In this study, we also explore how the positive link between family involvement and environmental innovation is dependent on family interlocks—the circumstance wherein a firm’s family directors are affiliated with the boards of directors of other firms. Specifically, we suggest that an increase in a firm’s family interlocks would strengthen the positive relationship between family involvement and environmental innovation. To test our ideas, we used a sample of 623 US public firms ranging from 1996 to 2010, which yielded 5047 firm-year observations. We find that family involvement facilitates the environmental innovation of firms. We also find that family interlocks intensify the positive effect of family involvement on environmental innovation. Finally, we discuss the theoretical and empirical implications of our results.

Earnings Quality in Acquired and Nonacquired Family Firms

2013 ◽  
Vol 26 (4) ◽  
pp. 374-386 ◽  
Author(s):  
Federica Pazzaglia ◽  
Stefano Mengoli ◽  
Elena Sapienza
Keyword(s):  
Family Firms ◽  
Earnings Quality ◽  
Socioemotional Wealth

We develop a socioemotional wealth explanation for the differences in earnings quality between family firms. We argue that the process by which families obtain ownership of firms is a key contingency affecting earnings quality. Specifically, firms acquired by families through market transactions display lower earnings quality due to lower identification of family owners relative to firms still owned by the families that created them. Acquired family firms benefit with respect to their earnings quality from having a nonfamily CEO while nonacquired family firms benefit from having a family CEO.

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