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The impact of private and family firms’ relational strength on financing performance in clusters

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  • Hua Song
  • Lan Wang

Abstract

Based on information asymmetry and embeddedness theory, this paper explores how relational strength reduces the information asymmetry between banks and firms and creates a positive relational spillover for the firms in the network to help private and family firms get good financing performance. We empirically verify relational strength enhances financing performance of private and family firms through horizontal information (in terms of horizontal hard information and horizontal soft information). Further, we conduct focused interviews to support empirical results that horizontal information mediates the relationship between relational strength and financing performance. Theoretical and managerial implications are discussed. Copyright Springer Science+Business Media, LLC 2013

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  • Hua Song & Lan Wang, 2013. "The impact of private and family firms’ relational strength on financing performance in clusters," Asia Pacific Journal of Management, Springer, vol. 30(3), pages 735-748, September.
    • Handle: RePEc:kap:asiapa:v:30:y:2013:i:3:p:735-748
    DOI: 10.1007/s10490-012-9316-6
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    Cited by:

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    3. Zhu, You & Zhou, Li & Xie, Chi & Wang, Gang-Jin & Nguyen, Truong V., 2019. "Forecasting SMEs' credit risk in supply chain finance with an enhanced hybrid ensemble machine learning approach," International Journal of Production Economics, Elsevier, vol. 211(C), pages 22-33.
    4. Jing Zhao & Michael Carney & Shubo Zhang & Limin Zhu, 2020. "How does an intra-family succession effect strategic change and performance in China’s family firms?," Asia Pacific Journal of Management, Springer, vol. 37(2), pages 363-389, June.
    5. Yuan Lu & Kevin Au & Mike Peng & Erming Xu, 2013. "Strategic management in private and family businesses," Asia Pacific Journal of Management, Springer, vol. 30(3), pages 633-639, September.
    6. César Camisón & José Antonio Clemente & Sergio Camisón-Haba, 2022. "Asset tangibility, information asymmetries and intangibles as determinants of family firms leverage," Review of Managerial Science, Springer, vol. 16(7), pages 2047-2082, October.
    7. Shihui Chen & Hanqing Chevy Fang & Niall G. MacKenzie & Sara Carter & Ling Chen & Bingde Wu, 2018. "Female leadership in contemporary Chinese family firms," Asia Pacific Journal of Management, Springer, vol. 35(1), pages 181-211, March.
    8. Thomas A. Birtch & Kevin Yuk-fai Au & Flora F. T. Chiang & Peter S. Hofman, 2018. "How perceived risk and return interacts with familism to influence individuals’ investment strategies: The case of capital seeking and capital providing behavior in new venture financing," Asia Pacific Journal of Management, Springer, vol. 35(2), pages 471-500, June.
    9. Song, Hua & Yang, Xuan & Yu, Kangkang, 2020. "How do supply chain network and SMEs’ operational capabilities enhance working capital financing? An integrative signaling view," International Journal of Production Economics, Elsevier, vol. 220(C).

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