Suchergebnisse

This book analyzes the impacts that family control of firms has on capital structure choices, leverage and the risk of financial distress, earnings management practices, and the relation between accounting choices and firm market value. For these purposes, longitudinal data on Italian family and non-family non-financial firms are closely analyzed. The Italian setting is of special interest in this context because family businesses account for 94% of GDP, families are particularly committed to maintaining control of firms, and the economy is bank based rather than market based. The analyses draw on the socioemotional wealth approach, which emphasizes the importance of the stock of emotional value in family firms, in combination with financial theories such as Pecking Order Theory, Trade-off Theory, and Agency Theory. The findings cast significant new light on differences between family and non-family firms and the effects of different forms of family influence. The book will have broad appeal for academics, managers, practitioners, and policymakers.

The authors investigate the question of whet her qualitative characteristics are likely to explain the survival of family firms in case of financial distress and whether these variables improve the explanatory power of quantitative variables in clarifying the different probability of distress between family and non-family firms. They focus their attention on the impact of the controlling owner and, using the Socioemotional Wealth theory (SEW), study the role of the family involvement in mitigating or accentuating the likelihood of distress. Using a dataset of 1,137 Italian family and non-family firms during 2004–2013, the authors found that family firms are significantly less likely to incur distress than non-family firms. The board dimension and the number of family members on board affect the probability of distress even controlling for some firm risk characteristics such as beta and ROA volatility, and there is also evidence of a gender mitigating effect in case of a female CEO.

This paper addresses the issue of financial communication quality by studying the determinants of earnings management practices in family and non-family businesses. Previous literature has highlighted the effect of a company's size, as a form of visibility, on earnings management practices. This study focuses on the analysis of the relationship between different forms of visibility—exposure to financial press, proximity to the consumer, size of assets, sales and firm age—and earnings quality. The results show that the forms of visibility taken into consideration have a different effect on earnings management practices. Furthermore, they show that family businesses are less likely to resort to these unethical practices, especially in the presence of financial press exposure and proximity of the business to the consumer.

AbstractWe analyze the effect of structural and demographic board diversity on family firms' corporate social performance (CSP), taking into account certain institutional and business environment aspects. The sample consists of French, German, Italian, Spanish and Portuguese nonfinancial listed firms over the period 2014–2021. We compare family and nonfamily firms before focusing on family businesses. Findings show that CSP benefits from having female directors in family firms whilst independent directors increase CSP in nonfamily businesses. Family directors exert a negative effect on CSP in family firms. The enforcement of law makes the positive influence of board independence significant for family firms and of nondual CEOs for nonfamily companies. Within family firms, the negative effect of family directors is strengthened by the enforcement of law but lowered by the efficiency of the judicial system. Hostile business environment always lowers CSP and reduces female directors' positive influence for family firms.

PurposeThis paper aims to investigate the effect of the nature of ownership and board characteristics on the investment choices in joint ventures (JVs) from the dimensional point of view, controlling for the effect of JV type and other components of intellectual capital.Design/methodology/approachThe authors study a sample of Italian, Spanish, German and French nonfinancial listed firms over the 2010–2018 period, controlling for the fixed effects of the company's sector of operation and the year. The authors also analyze the effect of family control and influence on JV investment size, taking into consideration certain board characteristics, the type of JV, human capital efficiency, structural capital efficiency and capital employed efficiency while also controlling for a firm's profitability and size. To test the hypotheses, GLS panel data was used.FindingsThe results indicate that the size of the investment in JVs is smaller for family firms than for nonfamily businesses. The presence of CEO duality has an opposing effect on the size of the investment in joint ventures as it has a lowering effect in family businesses while it exerts an amplifier influence in nonfamily businesses. Moreover, the type of joint venture has a significant effect for family firms: the choice of a link joint venture reduces the size of the investment. The authors find that human capital efficiency increases JV investment size for all firms.Originality/valueThis study is the first to analyze the effect of the main dimension of socioemotional wealth – family control and influence – on a firm's JV investment size. It controls for the effect of JV type – link or scale – and the interplay of the other IC components.

PurposeThis paper aims to study firms' attitudes toward using sustainability reporting for facilitating raising external capital and the effect of the ultimate controlling owner on disclosure.Design/methodology/approachA disclosure index is constructed on the basis of sustainability reports, for a sample of 230 Italian listed firms. Empirical analysis is based on panel data models.FindingsFirms are more prone to disclose when they are planning to issue equity/bonds. Family control does not affect disclosure in the case of bond issues, but it has a moderating effect in the case of equity issuance. A family CEO, increasing the family's sense of identification with the business, improves disclosure.Research limitations/implicationsFamily ownership is the most viable measure to assess its socioemotional wealth (SEW). This assesses only the dimension related to family control and influence but it does not take into account other aspects of SEW. This study focuses on the relationship between disclosure and financing choices; it does not analyze the relationship between disclosure and success of equity/bond issues.Practical implicationsFamily firms should improve their sustainability reporting, especially for firms operating in environmentally sensitive industries. Sustainability reports could play an effective role as a control mechanism in a firm's behavior toward the environment, society, its employees and consumers.Originality/valueThe paper contributes to the studies on sustainability, showing that the nature of ultimate controlling owners and firms' financing decisions affect disclosure. Moreover, it contributes to family firms' literature, shedding light on the effect of the family control and sense of identification with the firm on disclosure.