A comparison of family and nonfamily small firms in their approach to green innovation: A study of Italian companies in the agri‐food industry

Despite the growing scholars' attention toward green innovation, on the one hand, and family firms, on the other hand, there is still limited attention toward the intersection of these two streams of literature, because very few studies deal with green innovation in family firms. This paper aims at comparing family and nonfamily small firms in their approach to green innovation. To this aim, a multiple case studies methodology was used to understand whether and in which aspects family firms and nonfamily firms differ. In particular, a sample of 14 small enterprises (seven family and seven nonfamily firms) operating in the agri‐food industry and located in Italy was studied. Results suggest that family and nonfamily firms are similar with regard to green innovation characteristics, features of the green innovation process, faced challenges, and achieved outcomes. On the contrary, family firms differ from nonfamily firms in three key areas: firm's motivations, most relevant pressures, and green innovation view.     

An empirical investigation of going private decisions of U.S. firms

According to many managers, the Sarbanes-Oxley Act of 2002 caused the costs of being public to increase. Subsequently, following the Act, many firms went private rather than incur the costs. We investigate the differences in the financial characteristics of firms that went private between 1998 and 2003 and a control sample of firms which went public and did not go private Our results indicate that there are differences in the two groups, as well as differences in firms that went private prior to and following Sarbanes-Oxley. Taken together, our results are indicative of going private to avoid the higher costs of being public post Sarbanes-Oxley.     

The emergence of bifurcation bias from unbalanced families: Examining HR practices in the family firm using circumplex theory

Family firm human resource (HR) research focuses largely on examining differences in HR practices between family and nonfamily firms or between family and nonfamily employees within family firms. Few studies, however, attempt to explain why these differences emerge. We offer insight into the source of heterogeneous HR practices by investigating attributes of the owning family. We integrate a primary family science perspective, circumplex theory, to describe how an unbalanced family structure leads to unbalanced HR systems in the family firm. An unbalanced HR system is depicted as a form of bifurcation bias, or the asymmetric treatment of family and nonfamily employees via the family firm's HR practices. By integrating and extending circumplex theory into the family firm, insight is offered into how the structure of the family system influences the structure of the family business HR system, thus impacting firm outcomes. Implications for both scholars and practitioners are offered.     

Mixed oligopoly, foreign firms, and location choice

We investigate a mixed market in which a state-owned, welfare-maximizing public firm competes against n domestic private firms and m foreign private firms which are all profit-maximizing. A circular city model with quantity-setting competition is employed. We find that the equilibrium location pattern depends on m. All private firms agglomerate in the unique equilibrium if m is zero or one. Two foreign firms induce differentiation between domestic and foreign private firms. More than two foreign firms yield differentiation among the foreign firms. Regardless of n and m, agglomeration of all domestic private firms appears in equilibrium. We provide several conditions in which eliminating the public firm from the market enhances social welfare. We extend the basic model and investigate three issues concerning multiple public firms, inefficiency of the public firm, and entries by private firms. We obtain some additional implications of welfare and equilibrium locations.     

Private benefits extraction by the initial owner and the dynamic of ownership and control post‐initial public offering

We investigate the relation between the private benefits' extraction by the initial controlling shareholder and the likelihood of the change of control post‐initial public offering (IPO) in France. We find that (a) in a weak investor protection context, the initial controlling shareholder with high private benefits of control is less likely to relinquish control 5‐years post‐IPO. (b) The initial controlling shareholder extracts private benefits of control through high voting rights and when the founder is involved in control at IPO. (c) Family controlling shareholders are less likely to end up with change of control post‐IPO than nonfamily ones. Such behavior is more pronounced with substantial voting rights, when the founder is in control and when the founder or his heir is an executive director. High private benefits of control contribute therefore to foster the survival of the initial controlling shareholder post‐IPO. Our findings are robust even after using alternative proxies of private benefits of control and also after running a survival analysis.     

Privatisation and vertical integration under a mixed duopoly

This paper analyses the privatisation of public firms when private firms may be vertically integrated with their suppliers. We consider a mixed duopoly with a vertically integrated public firm. The private firm bargains the price of the input with its supplier if they are not vertically integrated. We find that for a given bargaining power of the private firm, it vertically integrates with its supplier if goods are weak substitutes. We also find that there is less vertical integration in the mixed duopoly than in the private duopoly. Finally, in general, the public firm is privatised when goods are close substitutes and the bargaining power of the private firm is low enough.     

Long-run growth and welfare effects of public policies with distortionary taxation

In a one-sector growth model with infrastructure investment, we study the impact of fiscal policies on growth. The government collects taxes on labor income and profits. The government uses these revenues to purchase infrastructure investment, provide utility enhancing government services, and to provide transfer payments to the households. We show that the balanced growth rate is an increasing function of the percent of government revenues that goes to infrastructure. We find that the growth maximizing mix of taxes depends on the elasticity of substitution between inputs. In particular, with distortionary taxes, the growth maximizing tax rate on capital is higher the lower the elasticity of substitution between private physical capital and public capital. In addition, the growth maximizing size of the government is higher when the elasticity of substitution between public and private inputs is low. We also investigate welfare effects of other public expenditures as well. Depending on the elasticity of substitution in production, the welfare implications of different public policies can be substantial.     

FAMILY FIRM PERFORMANCE OVER THE BUSINESS CYCLE: A META-ANALYSIS

The financial performance of family firms has been widely studied in the literature. Combining the results of 155 primary studies from 35 countries with data about business cycles, we investigate how family firm performance changes over the business cycle. Using meta-analytic estimation methods, we find that family firms outperform nonfamily firms in developed markets, irrespective of economic circumstances. This outperformance, although statistically significant, is very small and practically negligible. With regard to the business cycle, we find evidence for a procyclical effect in which the relative performance of family firms is lower in economically difficult times. Our study extends the literature on how family firm performance depends on macroeconomic factors.     

Socio-emotional wealth and corporate responses to environmental hostility: Are family firms more stakeholder oriented?

Do family firms care more for different stakeholders than nonfamily firms when operating in a hostile business environment? This study addresses this question and fills the existing void in family business research. It shows that family-controlled firms adopt corporate social responsibility strategies and balance the demands of internal and external interest groups to preserve their socio-emotional wealth while facing fierce competition, resource scarcity, and penurious economic conditions. More specifically, our analysis of an international sample of 956 listed firms from 2006 to 2014 reveals that family firms show a higher level of corporate social responsibility (CSR) performance and better stakeholder orientation than nonfamily firms. Our findings are useful for managers, policymakers, and responsible investors.     

Narcissistic leaders and corporate cash Holdings: Evidence in China

We use a sample of Chinese firms listed on the Stock Exchange of Hong Kong over the period 2007–2018 to examine the relationship between narcissistic leadership and corporate cash holdings. We find that narcissistic leaders seek to attract public attention and promote self-image by overinvestments that reduce cash holdings. We also show that narcissistic leaders have better access to bank loans and lower loan cost, prompting them to hold less cash. The negative effect of narcissistic leaders on cash holdings is more pronounced at private firms than at SOEs. In addition, narcissistic leaders negatively affect the firm value. We contribute to the literature on leader narcissism, cash holdings, and corporate governance in emerging market contexts.     

Regulation of road accident externalities when insurance companies have market power

Accident externalities that individual drivers impose on one another via their presence on the road are among the most important external costs of road transport. We study the regulation of these externalities when insurance companies have market power. Some of the results we derive have close resemblance to the earlier literature on externality regulation with market power in aviation and private roads, but there are important differences, too. Using analytical models, we compare the first-best public welfare-maximizing outcome with a private profit-maximizing monopoly, and oligopoly. We find that insurance companies will internalize some of the externalities, depending on their degree of market power. We derive optimal insurance premiums, and regular parametric taxes as well as “manipulable” ones that make the companies set socially optimal premiums. The latter take into account that the firm tries to exploit knowledge of the tax rule applied by the government. Finally, we also study the taxation of road users rather than that of firms.     

Family ownership and environmental performance: The mediation effect of human resource practices

Previous literature has found that listed family firms underperform their nonfamily counterparts in terms of environmental performance, but has not explained why this occurs. We address this research gap by hypothesizing that training and development practices (i.e., managerial practices devoted to providing training and development for the workforce) mediate the relationship between family blockholders and environmental performance. Using a sample of 33,901 firm‐year observations from 2002 to 2016 distributed across 56 countries and employing the structural equation model technique, we find that investment in training and development practices explains almost half of the negative relationship between family blockholders and environmental performance. Our study contributes to the agency theory debate on principal–principal problems by explaining why family blockholders could damage other blockholders and minority shareholders.     

Sustainability and Environmental Behaviour in Family Firms: A Longitudinal Analysis of Environment‐Related Activities,Innovation and Performance

Environmental behaviour plays an important role as concerns the public image and performance of firms, as well as for the achievement of sustainable development in society. This study investigates the behaviour of family firms regarding environment‐related activities, innovation and performance. Opposing goals are found to impact environmental behaviour of family firms, in particular the trade‐off between family firms' risk awareness and their aim of achieving socioeconomic wealth. We find that family firms initially lag regarding environment‐related activities, beneficial product, process and organizational innovations and performance. Yet, family firms catch up and show overall less volatility compared with other firms. Overall, we thus observe a convergence process between family and non‐family firms, which ultimately enables the two types of firm to achieve similar outcomes in terms of environment‐related activities, beneficial innovations and performance. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

The Corrosive Effect of Offshore Financial Centers on Multinational Firms’ Disclosure Strategy

Abstract

This study investigates whether U.S. multinational firms with subsidiaries located in offshore financial centers (OFCs) (i.e. offshore firms) are more likely to be opaque in their voluntary disclosure relative to U.S. multinationals without such subsidiaries (non-offshore firms). We use management earnings forecasts to capture corporate voluntary disclosure. Consistent with the opportunism view, but inconsistent with the efficiency argument, our results (including robustness checks) show that offshore firms are less likely to issue earnings forecasts, disclose forecasts less frequently, exhibit a stronger tendency to withhold bad news forecasts, and release less precise forecasts than non-offshore firms. Moreover, of the three distinct dimensions of OFCs’ institutional environment, namely, low taxation, lax regulation, and secrecy policy, each plays a role in negatively shaping firms’ disclosure strategy. Thus, OFCs’ institutional features exacerbate the opacity that plagues firms seeking to avoid taxes via their OFC subsidiaries. Our results are consistent with the notion that, beyond the scope of taxes, multinational firms’ use of OFCs has a corrosive effect on market information dynamics. Hence, OFCs have a much wider impact on the U.S. economy as well as other major economies than just tax avoidance or evasion.     

Entrepreneurial orientation in family firms: the moderating role of technological intensity and performance

This paper examines how socio-emotional factors can influence family firms’ commitment to entrepreneurially- oriented activities, and how their level of commitment is moderated by the technological intensity of the sector and firm performance. We find that, while family firms are less entrepreneurially-oriented than non-family firms, this gap closes with increasing technological intensity of the sector. We find no evidence, however, to suggest any change in entrepreneurial orientation in family firms resulting from a drop in firm performance.     

Mergers between local public firms

We consider a country made up of two regions, where each region owns a local public firm and a domestic private one. A national authority decides whether or not to merge the two local public firms. The result depends on whether the goods produced by the firms are homogeneous, substitutes or complements. We find that if the two local public firms produce the same good, the national authority is indifferent as to whether to merge or not. When local public firms produce different goods two cases arise. First, if the firms in each region produce homogeneous goods the national authority merges the two local public firms when the goods are complements, independent in demand and weak substitutes. Second, if the firms in each region produce heterogeneous goods the national authority merges the two local public firms only when the goods are close complements. Therefore, there is greater scope for mergers in the former case than in the later.     

Public and Private Management: What’s the Difference?

Critics of New Public Management argue that differences between public and private organizations are so great that business practices should not be transferred to the public sector. In this paper the theoretical arguments on the differences between private firms and public agencies are reviewed, and 13 hypotheses are identified on the impact of publicness on organizational environments, goals, structures and managerial values. Evidence from 34 empirical studies of differences between public agencies and private firms is critically evaluated. Only three of the publicness hypotheses are supported by a majority of the empirical studies: public organizations are more bureaucratic, and public managers are less materialistic and have weaker organizational commitment than their private sector counterparts. However, most of the statistical evidence is derived from studies that use narrow measures of publicness and fail to control for other relevant explanatory variables. Whether the existing evidence understates or overstates the distinctiveness of public agencies is therefore unclear. A research agenda and methods are identified for better comparisons of management in public and private organizations.     

A Dynamic Study on Ecological Disaster,Government Regulation,and Renewable Resources

This article develops a dynamic model to investigate renewable resource markets under different property rights. We find that different property rights regimes in renewable resource markets yield very different equilibria. Under private property rights, the valve point increases with the natural growth rate, productivity, number of firms, and marginal costs. Under common property rights, “the tragedy of the commons” inescapably occurs. This study suggests how to avoid ecological disaster by implementing a set of public policies.     

Mixed Duopoly with Subcontracting

Existing literature on mixed oligopoly focuses on competition among different types of firms but ignores their possible cooperation. We allow cooperation between a public firm and a private firm through subcontracting in a Hotelling mixed‐duopoly model. We find that when subcontracting is possible, the equilibrium without subcontracting is not socially optimal because subcontracting can lower total production costs. And if both firms engage in subcontracting, the existence of a public firm can guarantee the first best equilibrium, whether it is the low‐cost firm or not. But when a private firm is the low‐cost firm, it is more profitable for it to choose vertical foreclosure. And the consequent equilibrium is not socially desirable anymore. Copyright © 2014 John Wiley & Sons, Ltd.     

Skill shortages and labor market outcomes in Central Europe

The new Central European members of the EU have been characterized by low employment rates, especially among unskilled workers, despite the GDP recoveries and large private sector shares in output and employment. Evidence points at skill shortages in Central Europe as a key impediment to faster labor reallocation and convergence to the EU-15 employment structures. In this paper, we develop a simple model of labor reallocation with transaction costs and show how skill shortages can inhibit firm creation and increase income inequality. We use the model to examine the impact of training subsidies and their financing on skill acquisition and start-ups of new private firms, and show that the positive effect of subsidies would be mostly offset by high wage taxes. Shifting financing from wage to consumption taxes would improve incentives for workers’ training and firm start-ups, while relying more on income taxes could reduce the income gap between workers and entrepreneurs.