Session 457

Ownership and Funding Structures: Performance Implications for the entrepreneurial firms

Track K

Date: Monday, September 22, 2014

 

Time: 14:45 – 16:00

Common Ground

Room: Glasgow


Facilitator:

  • Joseph Lampel, University of Manchester

Title: Back To The Roots: Inherited Ownership Effects and Spawns’ Performance

Authors

  • Giuseppe Criaco, Rotterdam School of Management - Erasmus University
  • Mattias Nordqvist, Jonkoping University

Abstract: This paper analyzes inherited ownership effects, defined as socialization benefits that employees acquire while working in privately-held firms that may be transferred to a spawn. We test for inherited ownership effects in the population of Swedish entrepreneurial spawns competing in medium-high and high technology manufacturing industries. Preliminary results show that spawns of family-owned businesses survive at a higher rate than spawns of non-family-owned businesses. Moreover, spawns that share family ties with the parent company survive at a higher rate than spawns started by non-family members. This findings suggest the existence of inherited ownership effects that influence the performance of new firms.

Title: Behind Slack and Firm Performance: The Moderating Roles of Family Ownership and High-Tech Industry

Authors

  • Tommaso Minola, University of Bergamo
  • Massimo Baù, Jönköping international business school
  • Francesco Chirico, Jönköping University
  • Alfredo De Massis, Lancaster University

Abstract: While strategy and entrepreneurship literatures agree on the potential value of slack resources on organization’s behavior, risky and adaptation, prior research has obtained mixed theoretical and empirical evidence. Recent calls have been made for a contingency perspective on the slack-performance link. In this article, we investigate the effect of family ownership and industry characteristics on the relationship between high- and low-discretion slack and performance. Using a sample of over 14,000 Italian privately held firms, we find that family firms are less likely to perform in presence of higher levels of slacks. However, family ownership in high-tech industries negatively affects the use of high-discretional slacks, and positively affects the use of low-discretional slacks. Our findings offer a coherent framework to appreciate family ownership distinctiveness.

Title: Local Banking Industry Structure and New Firm Formation

Authors

  • Jaume Franquesa, Ohio Northern University

Abstract: Prior studies have found aspects of the structure of the local banking sector to be systematically related to entrepreneurship rates. This paper seeks to contribute to our further understanding of the interplay between local banking market structure and entrepreneurial activity, in the new context created after wholesale changes in the small business commercial lending sector in the U.S. The study uses a unique panel dataset of start-up rates and their likely antecedents across the 88 counties of the state of Ohio and for the first few years of the 21st century; and it investigates the impact of local banking market competitiveness and of the prevalence of small bank branches on new business starts.

Title: Opportunities, Options, and Opinions: How Context and Financing Relate to Firm Evolution and Performance

Authors

  • Chris Welter, Xavier University
  • Sungho Kim, Southern Illinois University

Abstract: We analyze entrepreneurial firm performance as it relates to uncertainty and external financing, specifically venture capital (VC) financing. We develop an NK simulation model that demonstrates how increasing uncertainty mitigates the positive performance effects brought by VC involvement. At higher levels of uncertainty, VC involvement initially improves performance but eventually decreases it. The model suggests that regardless of context, anchoring some amount of decisions may prove effective for entrepreneurial firms.

Title: Rely on You or Rely on Your Friends? Relational Dependence, Structural Dependence, and Venture Investment Termination

Authors

  • Han Jiang, University of Arizona
  • Lifang Gao, University of Southern Indiana
  • Albert Cannella Jr, Texas A&M University

Abstract: In this study we address an important yet relatively understudied question: when would venture capital firms terminate their investments in portfolio ventures they have already invested in? We address this question through a novel theoretical perspective that integrates resource dependence theory and social capital theory. Namely, we specifically distinguish two different forms of a firm’s dependence on its relational partner, i.e., relational dependence, which refers to the focal firm’s reliance on this partner’s valuable resource endowments, and structural dependence, which refers to the focal firm’s reliance on this partner’s advantageous position in the interorganizational network. We show that these two dependences will affect venture investment termination in different ways in different environments. Our study contributes to both venture financing literature and resource dependence theory.

Title: Resource Structuring: Linking Resource Acquisition, Accumulation, and Divestment in Family Firms

Authors

  • Francesco Chirico, Jönköping University
  • Dawn DeTienne, Colorado State University
  • Eric Clinton, Dublin City University
  • Salvatore Sciascia, IULM University-Milan

Abstract: While much has been written about the idiosyncratic nature of family firms, the processes of managing the resource base in family firms has received limited attention. We examine resource structuring in family firms, inclusive of resource acquisition, accumulation and divestment. Specifically, we theorize that family firms that engage in resource acquisition and accumulation achieve higher levels of resource divestment. While the family generation in control positively moderate these relationships, the presence of a family CEO negatively moderate them. Additionally, we predict that family CEOs in later generations also engage less in resource divestment. Our theory is tested on a sample of 241 Irish family firms.

All Sessions in Track K...

Sun: 08:00 – 09:15
Session 386: Entrepreneurial Corporate Governance
Sun: 09:30 – 10:45
Session 387: Social Capital in Emerging Markets: Local, Glocal or Global?
Sun: 11:15 – 12:30
Session 462: Crowdfunding: State of the Art and Directions for Future Research
Sun: 15:45 – 17:00
Session 235: Cognitive and Behaviorial Perspectives of Entrepreneurial Decision Making
Session 380: Small, Young and Entrepreneurial Firms: A Unique Perspective in Globalization
Sun: 17:15 – 18:30
Session 607: Entrepreneurship and Strategy IG Business Meeting
Mon: 08:00 – 09:15
Session 227: Entrepreneurial Orientation, capabilities and firm performance
Session 445: Adaptation issues for Entrepreneurial Firms
Mon: 11:00 – 12:15
Session 232: Theory Building in the Field of Entrepreneurship
Session 440: Entrepreneurial Strategies in Emerging and International markets
Mon: 14:45 – 16:00
Session 231: Entrepreneurial Leadership: What it Takes to be a Successful Enterprise?
Session 457: Ownership and Funding Structures: Performance Implications for the entrepreneurial firms
Mon: 16:30 – 17:45
Session 226: Culture, Norms and Institutions: The contextual influences on Entrepreneurship
Session 229: Who Founds and how the Founding Team Impacts the Entrepreneurial Firm?
Tue: 08:00 – 09:15
Session 224: Funding an Entrepreneurial Venture: What Works and What Does Not?
Session 236: Universities, Academics and Incubators: The Role of Academic Institutions in Shaping Entrepreneurial Firm and Outcomes
Tue: 11:00 – 12:15
Session 230: TMTs as Firm Resources
Session 309: New Conversations on Business Models
Tue: 15:30 – 16:45
Session 225: Entrepreneurial Networks: Formation and Implications
Session 228: Dynamic Capabilities and Performance Implications for New Firms
Tue: 17:15 – 18:30
Session 234: Institutional, Industry and Firm Specific Impacts on Nascent Firms
Session 441: Funding Entrepreneurial Ventures: Sources and Successes


Strategic Management Society

Madrid