Innovative family startups: an emerging research field
DOI:
https://doi.org/10.7433/s108.2019.08Keywords:
family startups; family business; innovative startupsAbstract
Purpose of the paper: The paper aims to study the value creation of Innovative Pure Family Startups (IPFS), which are innovative startups characterized by simple family governance, as compared to the Total population of Innovative Startups (TIS).
Methodology: Adopting the T-test analysis, the contribution detects whether significant differences exist between IPFS and TIS in terms of financial structure and profitability performance.
Findings: Results show that IPFS perform the best in terms of profitability. Moreover, they highlight IPFS’ preference for debt rather than opening up firm equity to external investors.
Research limits: Our results are limited to IPFS and not generalizable to all Innovative Family Startups, including Innovative Professional Family Startups. Moreover, no distinction between Innovative Family Spin-off and Innovative Family Newco is made.
Practical implications: Implications are related to business governance structure and organizational governance to support the managerial decision-making process.
Originality of the paper: The paper tries to fill a gap in both the literature on family business and on entrepreneurship. On the one hand, it analyzes the start-up phase of family businesses that is generally neglected in family business studies. On the other hand, it detects the contribution of family governance to the innovative startup phenomenon, while focusing on the role of family firms in innovative high tech industries that traditionally under-participate compared to their non-family counterparts.
References
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POUTZIOURIS P. (2001), “The Views of Family Firms on Venture Capital: Empirical Evidence From the UK Small to Medium-Size Enterprising Economy”, Family Business Review, vol. 14, n. 3, pp. 277-291.
ROMANO C., TANEWSKI G. SMYRNIOS K. (2001), “Capital Structure Decision Making: A Model for Family Business”, Journal of Business Venturing, vol. 16, n. 3, pp. 285-310.
SCHILLACI C.E., ROMANO M. (2012), Le Fondazioni tra mito di famiglia e sostenibilità intergenerazionale, McGraw-Hill Education, Milano.
SCHILLACI C.E. (2008), “Famiglia, impresa e paradosso co-evolutivo. Una diversa prospettiva di indagine sul family business”, in Devecchi C., Fraquelli G. (Eds), Dinamiche di sviluppo e internazionalizzazione del family business, Il Mulino, Bologna, p. 105-130.
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VAN ESSEN M., VAN OOSTERHOUT J., CARNEY M. (2011), “Corporate boards and the performance of Asian firms: A meta-analysis”, Asia Pacific Journal of Management, vol. 29, n. 4, pp. 873-905.
VILLALONGA B., AMIT R. (2006), “How do family ownership, control and management effect firm value?”, Journal of Financial Economics, vol. 80, n. 2, pp. 385-417.
WESTHEAD P., HOWORTH C. (2006), “Ownership and management issues associated with family firm performance and company objectives”, Family Business Review, vol. 19, n. 4, pp. 301-314.
WESTHEAD P., COWLING M. (1998), “Family Firm Research: the need for a methodological rethink”, Entrepreneurship Theory and Practice, vol. 23, n.1, pp. 31-56.
WILDAVSKY A. (1988), Searching for Safety, New Brunswick, CT: Transaction Books.
YU A., LUMPKIN G.T., SORENSON R.L., BRIGHAM K.H. (2012), “The landscape of family business outcomes”, Family Business Review, vol. 25, n. 1, pp. 33-57.
ANDRES C. (2008), “Large shareholders and firm performance: An empirical examination of founding-family ownership”, Journal of Corporate Finance, vol. 14, n. 4, pp. 431-445.
ASTRACHAN J.H., SHANKER M.C. (2003), “Family businesses’ contribution to the US economy: a closer look”, Family Business Review, vol. 16, n. 3, pp. 211-219.
ASTRACHAN J.H., KLEIN S.B., SMYRNIOS K.X. (2002), “The F-PEC scale of family influence: a proposal for solving the family business definition problem”, Family Business Review, vol. 15, n.1, pp. 45-58.
BERRONE P., CRUZ C., GOMEZ-MEJIA L.R. (2012), “Socioemotional Wealth in Family Firms Theoretical Dimensions, Assessment Approaches, and Agenda for Future Research”, Family Business Review, vol. 25, n. 3, pp. 258-279.
BJUGGREN P.O., PALMBERG J. (2010), “The impact of vote differentiation on investment performance in listed family firms”, Family Business Review, vol. 23, n. 4, pp. 327-340.
BLANCO-MAZAGATOS V., QUEVEDO-PUENTE E., CASTRILLO L. (2007), “The Trade-Off Between financial Resources and Agency Costs in the Family Business”, Family Business Review, vol. 20, n. 3, pp. 199-213.
BOPAIAH C. (1998), “Availability of credit to family businesses”, Small Business Economics, vol. 11, n. 1, pp. 75-86.
CHRISMAN J.J., CHUA J.H., STEIER L. (2005), “Sources and consequences of distinctive familiness: An introduction”, Entrepreneurship, Theory and Practice, vol. 29, n. 5, pp. 555-575.
CHRISMAN J.J., STEIER L.P., CHUA J.H. (2008), “Toward a Theoretical Basis for Understanding the Dynamics of Strategic Performance in Family firms”, Entrepreneurship Theory and Practice, vol. 25, n. 2, pp. 59-65.
CHUA J., CHRISMAN J., SHARMA P. (1999), “Defining the Family Business by Behavior”, Entrepreneurship Theory and Practice, vol. 23, n. 4, pp. 19-39.
DEMSETZ H., LEHN K. (1985), “The structure of corporate ownership: causes and consequences”, Journal of Political Economy, vol. 93, n. 6, pp. 1155-1177.
EDDLESTON K.A., KELLERMANNS F.W., ZELLWEGER T.M. (2012), “Exploring the entrepreneurial behavior of family firms: does the stewardship perspective explain differences?”, Entrepreneurship Theory and Practice, vol. 36, n. 2, pp. 347-367.
GOMEZ-MEJIA L.R., WISEMAN R.M. (2007), “Does agency theory have universal relevance?”, Journal of Organizational Behavior, vol. 28, n. 1, pp. 81-88.
HABBERSHON T., WILLIAMS M.L., MCMILLAN I. (2003), “A unified Systems Perspective of Family firm Performance”, Journal of Business Venturing, vol. 18, n. 4, pp. 451-465.
JAMES H. (1999), “Owner as Manager, Extended Horizons and the Family Firms”, International Journal of the Economics of Business, vol. 6, n. 1, pp. 41-55.
JIANG Y., PENG M.K.W. (2011), “Are family ownership and control in large firms good, bad, or irrelevant?”, Asia Pacific Journal of Management, vol. 28, n. 1, pp. 15-39.
LEE M. (2006), “Family firm performance: Further evidence”, Family Business Review, vol. 19, n. 2, pp. 103-114.
LENGNICK-HALL C., BECK T. (2005), “Adaptive Fit Versus Robust Transformation: How Organizations Respond to Environmental Change”, Journal of Management, vol. 31, n. 5, pp. 738-757.
LÓPEZ-GRACIA J., SÁNCHEZ-ANDÚJAR S. (2007), “Financial Structure of the Family Business: Evidence From a Group of Small Spanish Firms”, Family Business Review, vol. 20, n. 4, pp. 269- 287.
LUBATKIN M., SCHULZE W., LING Y., DINO R. (2005), “The effects of parental altruism on the governance of family-managed firms”, Journal of Organizational Behavior, vol. 26, n. 3, pp. 313-330.
MAZZI C. (2011), “Family business and financial performance: Current state of knowledge and future research challenges”, Journal of Family Business Strategy, vol. 2, n. 3, pp. 166-181.
MENÉNDEZ-REQUEJO S. (2006), “Ownership Structure and Firm Performance: Evidence from Spanish Family Firms”, in Poutziouris P., Smyrnios K., Klein S. (Eds), Handbook of Research on Family Business, Edward Elgar, USA.
MILTON L.P. (2008), “Unleashing the relationship power of family firms: identity confirmation as a catalyst for performance”, Entrepreneurship Theory and Practice, vol. 32, n. 6, pp. 1063-1081.
MORRESI O. (2009), “Impresa familiare e performance: una verifica empirica sulle imprese italiane quotate”, Finanza, Marketing and Produzione, n. 3, pp. 7-30.
NEUBAUER F., LANK A.G. (1998), The Family Business: Its Governance for Sustainability, Macmillan, Basingstoke.
O’BOYLE JR. E.H., POLLACK J.M., RUTHERFORD M.W. (2012), “Exploring the relation between family involvement and firms financial performance: A meta-analysis of main and moderator effect”, Journal of Business Venturing, vol. 27, n. 1, pp. 1-18.
OLSON P., ZUIKER V., DANES S.M., STAFFORD K., HECK R.K.Z., DUNCAN K.A. (2003), “The impact of the family and the business on family business sustainability”, Journal of Business Venturing, vol. 18, n. 5, pp. 639-666.
POUTZIOURIS P. (2001), “The Views of Family Firms on Venture Capital: Empirical Evidence From the UK Small to Medium-Size Enterprising Economy”, Family Business Review, vol. 14, n. 3, pp. 277-291.
ROMANO C., TANEWSKI G. SMYRNIOS K. (2001), “Capital Structure Decision Making: A Model for Family Business”, Journal of Business Venturing, vol. 16, n. 3, pp. 285-310.
SCHILLACI C.E., ROMANO M. (2012), Le Fondazioni tra mito di famiglia e sostenibilità intergenerazionale, McGraw-Hill Education, Milano.
SCHILLACI C.E. (2008), “Famiglia, impresa e paradosso co-evolutivo. Una diversa prospettiva di indagine sul family business”, in Devecchi C., Fraquelli G. (Eds), Dinamiche di sviluppo e internazionalizzazione del family business, Il Mulino, Bologna, p. 105-130.
TAGIURI R., DAVIS J. (1996), “Bivalent Attributes of the Family Firm”, Family Business Review, vol. 9, n. 2, pp. 199-208.
TALEB N.N. (2013), Antifragile. Prosperare nel disordine, Il Saggiatore, Milano.
VAN ESSEN M., VAN OOSTERHOUT J., CARNEY M. (2011), “Corporate boards and the performance of Asian firms: A meta-analysis”, Asia Pacific Journal of Management, vol. 29, n. 4, pp. 873-905.
VILLALONGA B., AMIT R. (2006), “How do family ownership, control and management effect firm value?”, Journal of Financial Economics, vol. 80, n. 2, pp. 385-417.
WESTHEAD P., HOWORTH C. (2006), “Ownership and management issues associated with family firm performance and company objectives”, Family Business Review, vol. 19, n. 4, pp. 301-314.
WESTHEAD P., COWLING M. (1998), “Family Firm Research: the need for a methodological rethink”, Entrepreneurship Theory and Practice, vol. 23, n.1, pp. 31-56.
WILDAVSKY A. (1988), Searching for Safety, New Brunswick, CT: Transaction Books.
YU A., LUMPKIN G.T., SORENSON R.L., BRIGHAM K.H. (2012), “The landscape of family business outcomes”, Family Business Review, vol. 25, n. 1, pp. 33-57.
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2019-04-30
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