IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i16p4447-d258436.html
   My bibliography  Save this article

Sibling Rivalry vs. Brothers in Arms: The Contingency Effects of Involvement of Multiple Offsprings on Risk Taking in Family Firms

Author

Listed:
  • Jin Chen

    (School of Management, University of Science and Technology of China, Hefei 230026, China)

  • Chengyuan Wang

    (School of Management, University of Science and Technology of China, Hefei 230026, China)

  • Qiong Wang

    (School of Economics, Hefei University of Technology, Hefei 230601, China)

  • Biao Luo

    (School of Management, University of Science and Technology of China, Hefei 230026, China)

Abstract

Succession process is a significant matter that is vital to the sustainability of a family firm. Families are generous in involving the offspring(s) into the family business so as to fulfill inter-generational succession. In this paper, we concentrate on the issue on the results of the involvement of multiple offsprings in family firms. By using data collected from China listed family firms between 2009 and 2015, we reveal that there exist contingency effects of the involvement of multiple offsprings on risk taking in different phrases. The involvement of new offspring(s) that leads the sibling rivalry to happen would increase risk taking of the family firm in a short-term. While for those family firms in which offsprings serve together as brothers in arms, risk taking is even lower than that of family firms with no more than one offspring. Our findings have managerial implications for dealing with succession process and maintaining sustainability of family businesses.

Suggested Citation

  • Jin Chen & Chengyuan Wang & Qiong Wang & Biao Luo, 2019. "Sibling Rivalry vs. Brothers in Arms: The Contingency Effects of Involvement of Multiple Offsprings on Risk Taking in Family Firms," Sustainability, MDPI, vol. 11(16), pages 1-16, August.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:16:p:4447-:d:258436
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/16/4447/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/11/16/4447/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Davide Del Prete & Giorgia Giovannetti & Enrico Marvasi, 2017. "Global value chains participation and productivity gains for North African firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(4), pages 675-701, November.
    2. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    3. Mauricio Jara‐Bertin & Félix J. López‐Iturriaga & Óscar López‐de‐Foronda, 2008. "The Contest to the Control in European Family Firms: How Other Shareholders Affect Firm Value," Corporate Governance: An International Review, Wiley Blackwell, vol. 16(3), pages 146-159, May.
    4. Alberto Abadie, 2005. "Semiparametric Difference-in-Differences Estimators," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 1-19.
    5. Koirala, Santosh & Marshall, Andrew & Neupane, Suman & Thapa, Chandra, 2020. "Corporate governance reform and risk-taking: Evidence from a quasi-natural experiment in an emerging market," Journal of Corporate Finance, Elsevier, vol. 61(C).
    6. Stefano Costa & Carmine Pappalardo & Claudio Vicarelli, 2017. "Internationalization choices and Italian firm performance during the crisis," Small Business Economics, Springer, vol. 48(3), pages 753-769, March.
    7. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    8. Martin R.W. Hiebl, 2013. "Risk aversion in family firms: what do we really know?," Journal of Risk Finance, Emerald Group Publishing, vol. 14(1), pages 49-70, February.
    9. Boubakri, Narjess & Cosset, Jean-Claude & Saffar, Walid, 2013. "The role of state and foreign owners in corporate risk-taking: Evidence from privatization," Journal of Financial Economics, Elsevier, vol. 108(3), pages 641-658.
    10. repec:diw:diwwpp:dp485 is not listed on IDEAS
    11. William S. Schulze & Franz W. Kellermanns, 2015. "Reifying Socioemotional Wealth," Entrepreneurship Theory and Practice, , vol. 39(3), pages 447-459, May.
    12. Bertrand, Marianne & Johnson, Simon & Samphantharak, Krislert & Schoar, Antoinette, 2008. "Mixing family with business: A study of Thai business groups and the families behind them," Journal of Financial Economics, Elsevier, vol. 88(3), pages 466-498, June.
    13. Eddleston, Kimberly A. & Kellermanns, Franz W., 2007. "Destructive and productive family relationships: A stewardship theory perspective," Journal of Business Venturing, Elsevier, vol. 22(4), pages 545-565, July.
    14. Robert J. R. Elliott & Liza Jabbour & Liyun Zhang, 2016. "Firm productivity and importing: Evidence from Chinese manufacturing firms," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(3), pages 1086-1124, August.
    15. Liu, Qigui & Luo, Tianpei & Tian, Gary Gang, 2015. "Family control and corporate cash holdings: Evidence from China," Journal of Corporate Finance, Elsevier, vol. 31(C), pages 220-245.
    16. Corten, Maarten & Steijvers, Tensie & Lybaert, Nadine, 2017. "The effect of intrafamily agency conflicts on audit demand in private family firms: The moderating role of the board of directors," Journal of Family Business Strategy, Elsevier, vol. 8(1), pages 13-28.
    17. Li, Kai & Griffin, Dale & Yue, Heng & Zhao, Longkai, 2013. "How does culture influence corporate risk-taking?," Journal of Corporate Finance, Elsevier, vol. 23(C), pages 1-22.
    18. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    19. Leon Schjoedt & Erik Monsen & Allison Pearson & Tim Barnett & James J. Chrisman, 2013. "New Venture and Family Business Teams: Understanding Team Formation, Composition, Behaviors, and Performance," Entrepreneurship Theory and Practice, , vol. 37(1), pages 1-15, January.
    20. Xu, Nianhang & Yuan, Qingbo & Jiang, Xuanyu & Chan, Kam C., 2015. "Founder's political connections, second generation involvement, and family firm performance: Evidence from China," Journal of Corporate Finance, Elsevier, vol. 33(C), pages 243-259.
    21. Weng, Tzu-Ching & Chi, Hsin-Yi, 2019. "Family succession and business diversification: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 53(C), pages 56-81.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Qiong Wang & Ru Yang & Ruyue Zhao & Chengyuan Wang, 2019. "Does State-level Upgrade of High-tech Zones Promote Urban Innovation Efficiency: Evidence from China," Sustainability, MDPI, vol. 11(21), pages 1-14, November.
    2. Lin, Nidthida & Wilden, Ralf & Chirico, Francesco & Ghasrodashti, Elahe & DeTienne, Dawn R., 2022. "Persist or let it go: Do rational entrepreneurs make decisions rationally?," Journal of Business Venturing, Elsevier, vol. 37(4).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Del Prete, Davide & Ghins, Léopold & Magrini, Emiliano & Pauw, Karl, 2019. "Land consolidation, specialization and household diets: Evidence from Rwanda," Food Policy, Elsevier, vol. 83(C), pages 139-149.
    2. Ren, Xiaoyi & Liu, Xing, 2024. "Passing the dividend baton: Family succession and cash dividends," International Review of Financial Analysis, Elsevier, vol. 94(C).
    3. Fuxiu Jiang & Xiaojia Zheng & Wei Tang, 2018. "Non-family chair and corporate performance," Frontiers of Business Research in China, Springer, vol. 12(1), pages 1-30, December.
    4. Amore, Mario Daniele & Miller, Danny & Le Breton-Miller, Isabelle & Corbetta, Guido, 2017. "For love and money: Marital leadership in family firms," Journal of Corporate Finance, Elsevier, vol. 46(C), pages 461-476.
    5. Pan, Yue & Weng, Ruoyu & Xu, Nianhang & Chan, Kam C., 2018. "The role of corporate philanthropy in family firm succession: A social outreach perspective," Journal of Banking & Finance, Elsevier, vol. 88(C), pages 423-441.
    6. Xia, Xiaoxue & Wang, Chen & Lu, Chao & Zhu, Tianqi & Zhao, Ziying & Zhao, Yiwen, 2024. "High-speed railway and corporate risk-taking: Channels and evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 74(C).
    7. Suveera Gill & Parmjit Kaur, 2015. "Family Involvement in Business and Financial Performance: A Panel Data Analysis," Vikalpa: The Journal for Decision Makers, , vol. 40(4), pages 395-420, December.
    8. Christian Volpe Martincus & Jerónimo Carballo & Pablo M. Garcia, 2012. "Public programmes to promote firms’ exports in developing countries: are there heterogeneous effects by size categories?," Applied Economics, Taylor & Francis Journals, vol. 44(4), pages 471-491, February.
    9. Wang, Jin, 2013. "The economic impact of Special Economic Zones: Evidence from Chinese municipalities," Journal of Development Economics, Elsevier, vol. 101(C), pages 133-147.
    10. Christian Volpe Martincus, 2010. "Odyssey in International Markets: An Assessment of the Effectiveness of Export Promotion in Latin America and the Caribbean," IDB Publications (Books), Inter-American Development Bank, number 16458, February.
    11. Xu, Aiting & Song, Miaoyuan & Wu, Yunguang & Luo, Yifan & Zhu, Yuhan & Qiu, Keyang, 2024. "Effects of new urbanization on China's carbon emissions: A quasi-natural experiment based on the improved PSM-DID model," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    12. Jabbour, Liza & Tao, Zhigang & Vanino, Enrico & Zhang, Yan, 2019. "The good, the bad and the ugly: Chinese imports, European Union anti-dumping measures and firm performance," Journal of International Economics, Elsevier, vol. 117(C), pages 1-20.
    13. Gallego, Francisco & Larrain, Borja, 2012. "CEO compensation and large shareholders: Evidence from emerging markets," Journal of Comparative Economics, Elsevier, vol. 40(4), pages 621-642.
    14. Xiao, Jihong & Chen, Xian & Li, Yang & Wen, Fenghua, 2022. "Oil price uncertainty and stock price crash risk: Evidence from China," Energy Economics, Elsevier, vol. 112(C).
    15. repec:diw:diwwpp:dp1630 is not listed on IDEAS
    16. Francisco Gallego & Borja Larraín, 2010. "CEO Compensation among Firms Controlled by Large Shareholders: Evidence from Emerging Markets," Documentos de Trabajo 379, Instituto de Economia. Pontificia Universidad Católica de Chile..
    17. Tzu-Ching Weng & Kai-Jui Hsu & Tzu-Hsuan Kuo, 2023. "Family Succession and Quality of Financial Information: Evidence from China," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 13(3), pages 1-4.
    18. Verena Lauber & Johanna Storck, 2016. "Helping with the Kids? How Family-Friendly Workplaces Affect Parental Well-Being and Behavior," SOEPpapers on Multidisciplinary Panel Data Research 883, DIW Berlin, The German Socio-Economic Panel (SOEP).
    19. Pender, John & Reeder, Richard, 2011. "Impacts of Regional Approaches to Rural Development: Initial Evidence on the Delta Regional Authority," Economic Research Report 262240, United States Department of Agriculture, Economic Research Service.
    20. Urban, Dieter M & Weder di Mauro, Beatrice & Moser, Christoph, 2009. "Offshoring, Firm Performance and Establishment-Level Employment: Identifying Productivity and Downsizing Effects," CEPR Discussion Papers 7455, C.E.P.R. Discussion Papers.
    21. Patricio Duran & Marcelo Ortiz, 2020. "When More Is Better: Multifamily Firms and Firm Performance," Entrepreneurship Theory and Practice, , vol. 44(4), pages 761-783, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2019:i:16:p:4447-:d:258436. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.