IDEAS home Printed from https://ideas.repec.org/a/now/jnlrcf/114.00000032.html
   My bibliography  Save this article

Diversity in Family Business: Where Social Goals Collide with Family Socioemotional Wealth

Author

Listed:
  • Jijun Gao
  • Mingzhi Liu
  • Yefeng Wang

Abstract

Using a sample of 2,000 largest industrial firms in the U.S, we investigate how family involvement influences corporate diversity and whether a governance mechanism – dual-class share structure – moderates this effect. Contrary to typical socioemotional wealth (SEW) predictions, we argue that family firms will tend to engage less in diversity than nonfamily firms due to family firms’ desire to maintain family control and relatively lenient societal pressure on them. We also argue that the adoption of dual-class share arrangement exacerbates family dominance, thus strengthening the negative impact of family involvement on diversity. The results support our arguments and point out the boundary of SEW when involving issues of diversity. We find that family involvement decreases the level of overall diversity, by both engaging less diversity initiatives and causing more diversity-related concerns. Such negative relationship is more pronounced among family firms adopting a dual-class share structure where family owners gain greater control of business. These findings are very robust and provide important theoretical and policy implications.

Suggested Citation

  • Jijun Gao & Mingzhi Liu & Yefeng Wang, 2022. "Diversity in Family Business: Where Social Goals Collide with Family Socioemotional Wealth," Review of Corporate Finance, now publishers, vol. 2(4), pages 861-884, December.
    • Handle: RePEc:now:jnlrcf:114.00000032
    DOI: 10.1561/114.00000032
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1561/114.00000032
    Download Restriction: no
    File URL: https://libkey.io/10.1561/114.00000032?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

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


    Cited by:

    1. Katrin Hussinger & Wunnam Issah, 2023. "Early Patent Disclosure and R&D Investment in Family Firms," DEM Discussion Paper Series 23-17, Department of Economics at the University of Luxembourg.
    2. Haider, Zulfiquer & Wang, Yefeng & Wang, Yuan, 2024. "Family firm, financial constraint, and environmental preparedness: An international study," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 92(C).
    3. Sang‐Joon Kim & Jongwan Bae & SoHyeon Kang, 2024. "The cross‐cutting pursuit of family values: When and how do family firms engage in corporate environmental responsibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 2749-2769, July.

    More about this item

    Keywords

    Family involvement; dual-class share structure; diversity; socioemotional wealth; agency problem;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

    Statistics

    Access and download statistics

    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:now:jnlrcf:114.00000032. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Lucy Wiseman (email available below). General contact details of provider: http://www.nowpublishers.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.