Family Influence on Performance of Family Small and Medium Enterprises (Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application)

This book examines the relationship between family influence and financial performance and non-economic goals in small and medium family-owned enterprises (SME) in Portugal. Research on the performance of family-owned firms is growing but results are mixed, especially for non-listed companies. This book examines smaller family-owned firms that operate in a small, open economy, characterised by a context of relatively weak capital markets and predominantly bank-based financing. Delving into the impact of key variables such as the power dimension, experience and culture on performance establishes, the book goes on to analyse the determinants of performance in such family-owned SMEs. Given the importance of family firms to open economies, this book would be a valuable read to scholars aiming to understand the reasons behind their success, managers seeking out strategic and operational guidance and to regulators and policymakers at the regional and national levels. Foreword 6 Contents 8 Abbreviations and Acronyms 10 List of Figures 11 List of Tables 12 1 Introduction 14 2 Theoretical Background 17 2.1 The Evolution of the Family Business Academic Field 17 2.2 The Definition of Family Firm 21 2.3 The Relevance of Family Businesses 25 3 Family Influence and Performance 32 3.1 Family Influence: F-PEC Dimensions 32 3.1.1 The Influence of the Family Through the Power Dimension 33 3.1.2 The Influence of the Family Through the Experience Dimension 35 3.1.3 The Influence of the Family Through the Culture Dimension 36 3.2 Family Firm Performance 37 3.2.1 The Relationship Between Ownership and Family Management: The Perspectives of Agency Theory and Stewardship Theory 37 3.2.1.1 The Agency Theory 38 3.2.1.2 The Stewardship Theory 40 3.2.2 Different Family Business Performance Dimensions 41 4 Research Hypotheses 59 4.1 Research Hypotheses Development 59 4.2 Theoretical Framework 67 5 Research Methodology 68 5.1 Sample 68 5.2 Data Collection 69 5.3 Variables 70 5.3.1 Dependent Variables: Economic and Noneconomic Performance 70 5.3.2 Independent Variables: Family Influence 71 5.3.2.1 Power Subscale 72 5.3.2.2 Experience Subscale 75 5.3.2.3 Culture Subscale 75 5.3.3 Mediating Variables: Stewardship Variables 76 5.3.4 Control Variables 77 5.4 Methods 78 6 Analyses and Discussion of Results 80 6.1 Characterization of the Sample 80 6.1.1 Location and Activity Sector 81 6.1.2 Firm Size 82 6.1.3 Ownership and Management Structure 84 6.1.4 Continuity and Leadership (Succession) 87 6.1.5 Profile of Respondents (Administrator/Manager) 90 6.2 Variable Measurement 91 6.2.1 Performance 91 6.2.2 Family Influence 94 6.2.3 Stewardship Behavior 97 6.3 Results of Multiple Linear Regression Models 99 6.3.1 Variables of the Regression Models 99 6.3.2 Validation of the Assumptions of Linear Regression Models 99 6.3.3 Requirements for Mediation Analysis 101 6.3.4 Results of the Effects of Family Influence on Economic Performance 102 6.3.5 Results of the Effects of Family Influence on Medium- and Long-Term Goals 106 6.3.6 Results of the Effects of Family Influence on Family Wealth 107 6.4 Discussion of Results 108 7 Conclusions, Contributions, and Recommendations 111 7.1 General Conclusions of the Investigation 111 7.2 Research Contributions 114 7.3 Limitations and Directions for Future Research 115 Appendices 117 References 121