Succession in family versus nonfamily SMEs: What influence does it have on performance?

The literature on family SMEs usually shows a negative influence of succession on performance. Based on a behavioural approach, we identify several advantages of intrafamily succession that enhance value creation. In order to confirm the positive impact of intrafamily succession on performance, a matched pair research design is used to compare the effect of succession between 102 family and nonfamily SMEs. Our results indicate that intrafamily succession contributes to value creation in family SMEs. Moreover, intrafamily succession leads to higher levels of performance in comparison with nonfamily SMEs experiencing succession and ownership transfer. Copyright © 2014 ASAC. Published by John Wiley & Sons, Ltd.     

The Impact of Family Involvement on SMEs’ Performance: Theory and Evidence

By complementing agency theory with behavioral assumptions, we explore the effects of family involvement on small and medium enterprises’ (SMEs) performance. We identify three separate dimensions of family involvement and hypothesize nonlinear, direct, and interaction effects on the performance of an SME. The evidence on 787 SMEs suggests that an inverted U‐shaped relationship exists between family ownership and performance, and ownership dispersion among family members negatively affects performance. Balancing family and nonfamily members in the top management team (TMT) is found to be beneficial to SMEs’ performance, but the family ratio in the TMT becomes crucial only at high levels of family ownership.     

Influence of family ownership on small business growth. Evidence from French SMEs

The performance implications of family ownership have been studied extensively. However, studies that investigate the influence of family ownership on small business growth remain scarce and suffer from several shortcomings. To remedy these shortcomings, this paper uses a very large sample of French SMEs to explore the relationship between family ownership and small business growth. First, this study shows that there is a negative, although non-monotonic, relationship between family ownership and small business economic growth. Second, it explores the channel through which family ownership affects firm growth. Results suggest that firms with greater family ownership are prone to below-potential rates of economic growth, given their internal financing resources. Overall, the results suggest that small family businesses have a propensity to deliberately limit their growth (i.e., they adopt conservative growth behavior).     

The evolving role of organisational and personal networks in international market venturing

In a study of 1304 Australian manufacturing industry SMEs, we investigate the relationships among networking (i.e., inter-personal and inter-organisational networks), international market venturing (i.e., export intensity), and family ownership. We find evidence that (1) inter-personal networking and inter-organisational networking positively influence SME international market venturing, but this relationship is contingent on a time lag effect, and (2) family ownership negatively moderates the effect of inter-organisational networking on international market venturing. Implications for managerial practice and public policy are discussed.     

Determinants of capital structure in Irish SMEs

This paper presents an empirical examination of determinants of the capital structure of a sample of 299 Irish small and medium-sized enterprises (SMEs). Results suggest that age, size, level of intangible activity, ownership structure and the provision of collateral are important determinants of the capital structure in SMEs. A generalisation of Zellner’s (Journal of the American Statistical Association 57, 348–368, 1962) seemingly unrelated regression (SUR) approach is used to examine industry effects and to test the stability of parameter estimates across sectors. We find that the influence of age, size, ownership structure and provision of collateral is similar across industry sectors, indicating the universal effect of information asymmetries. Firms overcome the lack of adequate collateralisable firm assets in two ways: by providing personal assets as collateral for business debt, and by employing additional external equity to finance research and development projects.     

External managers,family ownership and the scope of SME internationalization

SMEs are important to world business and the majority of SMEs are family firms. Yet some family SMEs are inert, local firms while others are dynamic and international. Do certain governance structures encourage the scale and scope of their internationalization? We jointly apply social capital and corporate governance theories to explain the scope of family SMEs internationalization, and find that professional managers externally recruited from outside the family are important, but only for lower levels of family ownership, suggesting synergistic combinations of ownership and management. It is the combination of external capital with external managers that really works.     

China goes global: public policies' influence on small- and medium-sized enterprises' international expansion

Despite small- and medium-sized enterprises' (SMEs) significant contribution to China's social and economic development, very little has been written about the influence that public policies (i.e. public funding priorities and regulatory measures) may have on the first stage of international expansion of Chinese SMEs. To help fill this gap, the article analyses five main factors related to public policies and services affecting Chinese SMEs' internationalization: access to public financial resources; participation of the government in ownership; access to public procurement contracts; adverse regulatory and inconsistent legal frameworks; and public assistance on information and knowledge about markets. The main conclusion is that SMEs appear to base their international expansion on private capabilities, rather than on support from the government; in addition, the perceived barriers for the international expansion of these firms may be mainly internal, rather than institutional.     

Do as the large enterprises do?: Expatriate selection and overseas performance in emerging markets: The case of Taiwan SMEs

This study investigated the less explored expatriation practices of small- and medium-sized enterprises (SMEs) in emerging markets. Data for 133 Taiwan SMEs operating in Malaysia and Vietnam revealed that four personality traits of expatriates, i.e., control ability, independence, openness and social ability exert significant influences on overseas performance given that different types of performance require different of expatriate competency. Analytical results also indicated that the widely perceived influence of the favorable evaluation of the expatriate by top managers does not impact the overseas performance of expatriates. Further, the expatriate practices of Taiwan SMEs vary depending on cultural differences between the home country and host countries. Taken together, the findings of this study have valuable implications for both academicians and practitioners in international management.     

The Effects of Ownership and Governance on SMEs’ International Knowledge-based Resources

Small- and medium-sized enterprises (SMEs) play an important role in today’s global economy. However, there are significant differences in how they respond to the opportunities and threats in international markets. This study␣suggests SMEs’ ownership and governance systems significantly influence the development of knowledge-based resources necessary for internationalization. Using a sample of 384 US SMEs, we find a positive relationship between both the equity held by top management team members and venture capitalists and the development of these important resources. This positive association is further accentuated by the presence of independent outside directors on SMEs’ boards, supporting their monitoring and enterprising roles.      

The Dynamic Role of Small Firms: Evidence from the U.S.

This paper provides a conceptual and empirical account of the dynamic role of SMEs in the U.S. economy. Evidence is provided to show that SMEs are important sources of employment growth and innovation. For example, the net employment gain during 1990–95 is shown to be greater among smaller firms than among larger firms. Furthermore, while large firms often produce a larger number of patents per firm, the patenting rate for small firms is typically higher than that for large firms when measured on a per-employee basis. It is noted that public policy is shifting away from traditional measures which were based on a static conception of industrial organization and thus emphasized anti-trust, regulation and public ownership solutions, towards measures which are geared towards supporting the dynamic role of SMEs. These measures focus on providing an enabling environment for enterprise start-ups, job creation, knowledge spillovers and technological change.     

The Decision to Enter and Exit Foreign Markets: Evidence from U.K. SMEs

This paper studies the dynamics of the export behaviour of small and medium sized enterprises (SMEs) in the U.K. between 1994 and 1998. I use a dynamic empirical model to disentangle three distinct dimensions of a firms’ participation in foreign markets: sunk cost induced hysteresis, firm heterogeneity and macroeconomic instability. The results show that SMEs view exporting as an irreversible investment, with state dependence being the largest explanatory factor. Moreover, observable firm characteristics, such as size and ownership, play a significant role in distinguishing exporters from non-exporters. Finally, there is no evidence that the 1992–1993 recession influenced firms’ export decisions in subsequent years implying that the results provide a valid indication of SMEs "typical" export behaviour.     

Seasoned equity offerings by small and medium-sized enterprises

Most analyses of small firms’ decision to seek outside equity financing and the conditions thereof concern private firms. Knowledge of the risk and return of entrepreneurial ventures for outside investors is consequently limited. This paper attempts to fill this gap by examining the Canadian context, where small and medium-sized enterprises (SMEs) are allowed to list on a stock market. We analyze seasoned equity offerings launched by SMEs over the last decade. These public issuers can be considered low quality firms with poor operating performance. Managers issue equity before a large decrease in operating and stock market performance. Individual investors do not price the stocks correctly around the issue and incur significant negative returns in the years following the issue. This is particularly true for constrained issuers. We confirm that entrepreneurial outside equity attracts lemons and that individual investors cannot invest wisely in emerging ventures. Probably as a consequence of individual investors’ lack of skill and rationality, the cost of outside equity financing of Canadian public SMEs is abnormally low.     

"Greening" SMEs' Competitiveness

Over the last few years, public institutions, the market, the financial community and non governmental associations have explicitly demanded that firms improve their environmental performance. However, in spite of the strong pressure from external stakeholders, recent studies have highlighted the fact that only large corporations adopt a pro-active environmental strategy, whereas SMEs tend to comply with external pressures, thus adopting a re-active strategy. In the light of these issues, the paper analyses the stakeholders' role in supporting SMEs' shift from a reactive to a proactive pattern of environmental behavior. In particular, the study seeks to: design a conceptual model which describes stakeholders' "direct role", i.e. providing SMEs with resources, as well as their "indirect role", i.e. encouraging SMEs to develop co-operative relationships and creating the necessary conditions for collaboration in improving their environmental performance, and verify empirically stakeholders' actual role in supporting SMEs' environmental development.     

The Driver of Green Innovation and Green Image – Green Core Competence

This study proposed a novel construct – green core competence – to explore its positive effects on green innovation and green images of firms. The results showed that green core competences of firms were positively correlated to their green innovation performance and green images. In addition, this research also verified two types of green innovation performance had partial mediation effects between green core competences and green images of firms. Therefore, investment in the development of green core competence was helpful to businesses for the enhancement of their green innovation and green images. Furthermore, this study found that green core competence, two types of green innovation performance, and green images of medium & small enterprises (SMEs) were all significantly less than those of large enterprises in the information and electronics industry in Taiwan. Therefore, there was the advantage of firm size for the green core competence in this industry, and it was imperative for SMEs to develop and create their green core competences to strengthen their green innovation performance, and green images.     

Organizational learning and entrepreneurship in family firms: exploring the moderating effect of ownership and cohesion

Organizational learning can significantly improve family firms’ ability to counter by stimulating entrepreneurship. Applying the behavioral theory of the firm, this study empirically examines the effect of family ownership on the breadth, depth, and speed of organizational learning. Each of these dimensions can influence entrepreneurship. Furthermore, the effect of ownership on organizational learning depends on family cohesiveness, the extent to which members of the owner family feel closeness, mutual solidarity, and the desire to stick together. Data from 741 firms show that family ownership is positively associated with the breadth and speed of learning but is negatively associated with the depth of learning. Though cohesiveness does not alleviate the negative effect of family ownership on the depth of learning, it amplifies the effect of family ownership on the breadth and speed of learning. Organizational learning, especially its breadth and depth, positively influences the pace of family firms’ entrepreneurship.     

Corporate governance and firm performance in emerging markets: Evidence from Turkey

This is a study of the relationship between context, internal corporate governance and firm performance, looking at the case of Turkey, an exemplar of family capitalism. We found more concentrated ownership, often in the hands of families, led to firms performing better; concentrated ownership means that controlling families bear more of the risks of poor performance. Less predictably, given that the institutional environment is so well attuned to family ownership, we found that mechanisms that accord room for a greater range of voices and interests within and beyond families – larger boards and foreign ownership stakes – seem to also make for positive performance effects. We also noted that increase in cross ownership did not influence market performance, but was negatively associated with accounting performance. Conversely, we found that a higher proportion of family members on boards had no discernable effect on performance. Our findings provide further insights on the relationship between the type of institutions encountered in many emerging markets, internal corporate governance configurations and firm performance.     

家族企业社会责任与企业绩效:内部能力与外部关系的调节效应

文章利用浙江和重庆两地351家家族企业调查数据,在将家族企业社会责任区分为内部人责任、外部人责任和公共责任的基础上,实证检验了家族企业社会责任与企业绩效关系及内部能力和外部关系的调节效应.结果显示:第一,高内部能力(制造能力、吸收能力)家族企业内部人责任对绩效的影响更大;高吸收能力家族企业公共责任对绩效的影响更小;具有丰富外部关系(高密度、大范围关系网络)家族企业外部人责任对绩效的影响更大.第二,高内部能力家族企业中,内部人责任对绩效有显著的正向影响,公共责任对绩效有显著的负向影响.低吸收能力家族企业中,内部人责任对绩效有显著的负向影响;具有低密度关系网络家族企业中,内部人责任对绩效有显著的正向影响,公共责任对绩效有显著的负向影响;具有大范围关系网络家族企业中,公共责任对绩效有显著的负向影响.     

Networking and internationalization of SMEs in emerging economies

Networking has been established as an important source of small- to medium-sized enterprises (SMEs) business expansion in many developed economies. Often, it provides the necessary intelligence leading to internationalization. The question this study addresses is “What are the roles and sources of networking of SMEs internationalization in emerging economies?” This study responds to this query through a dyadic study involving expert-opinion survey of SME development professionals and case studies of SMEs internationalization. The convergent views identified three interconnected sources of networking for SMEs internationalization, which are government institutions, business associates, and personal relations. The results affirmed that accomplishment of internationalization requires cohesion among the myriads of networking sources and operating agencies. A systems approach towards supporting the creation and management of networking linkages for internationalization combines systems thinking perspective with institutional view. It emphasizes integration of coordination, facilitation, and monitoring functions. Thus, suggesting institutional support and systems thinking are important constructs in the theory of international entrepreneurship. Policy makers and entrepreneurs of SMEs gain actionable points to ensure effectiveness of institutional support mechanism and to enhance their business internationalization, respectively.     

Family supportive culture, work-life segmentation and employee��s organizational attachment: The case of high-tech industry in Taiwan

This study examines the relationship among family supportive culture, organizational attachment, and work-life segmentation in high-tech service industry in Taiwan, China. Using survey data from 369 professionals, this study shows that family supportive culture has significant influence on organizational attachment, namely, affective commitment. Results indicate that individuals’ work-life segmentation has a significant negative effect on organizational attachment. Meanwhile, our results further apply employees’ segmentation between work and life as a moderator to investigating the impact of individual’s perceptions of family supportive culture and values on a sense of attachment toward organizations. The result illustrates that work-life segmentation does not moderate the relationship between supportive family culture and employees’ organizational attachment. Findings from this research provide insights into the influence of organizational family supportive culture and how it may further encourage employees’ organizational attachment in high-tech industry in Taiwan.