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Family Firm Mergers and Acquisitions in Different Legal Environments

Feito-Ruiz, I., Menendez-Requejo, S. — Thu, 19 Nov 2009 13:15:41 PST

This study analyses family versus nonfamily firm returns under different legal environments when a merger and acquisition (M&A) is announced. The database includes 124 M&As of European-listed firms (15 countries), with acquired firms being worldwide public or private firms (23 countries), over the 2002 to 2004 period. The findings show that family ownership has a positive and significant influence on acquiring shareholder M&A valuation. However, a major shareholder ownership of 32% has a negative effect. The authors also observe that a weaker legal and institutional environment in the target country has a positive influence on acquiring shareholder valuation.

Advancing the Field of Family Business Research: Further Testing the Measurement Properties of the F-PEC

Holt, D. T., Rutherford, M. W., Kuratko, D. F. — Tue, 20 Oct 2009 11:24:16 PDT

The field of family business research is advanced by further examining the validity and reliability of Klein, Astrachan, and Smyrnios’s Family Influence on Power, Experience, and Culture Scale. Data from 831 family businesses are analyzed to assess the measure’s construct validity using exploratory and confirmatory techniques. The hypothesized three-factor model emerged to include culture, power, and experience. Extending the previous effort, the measure’s convergent validity was tested by assessing differences between the measure’s scores and the desires of the senior generation and the commitment of the next generation. Results support an initial level of convergent validity.

A Configurational Approach of the Relationship Between Entrepreneurial Orientation and Growth of Family Firms

Casillas, J. C., Moreno, A. M., Barbero, J. L. — Fri, 09 Oct 2009 07:56:17 PDT

The present research aims to improve scholars’ understanding of the relationship between entrepreneurial orientation (EO) and the growth of family firms in two areas. The authors propose that the EO–growth relationship is contingent on different contextual variables—environmental dynamism and environmental hostility—and an internal variable—generational involvement. Also, they consider EO to be a composite construct integrated from and related to different independent dimensions. Using information from 317 Spanish family firms, results show that (a) EO positively influences growth only in second-generation family businesses, (b) the moderating influence of the generational involvement is related to the risk-taking dimension, and (c) dynamism and hostility of the environment, respectively, moderate the relationship between EO and growth in a positive sense.

Life Settlements From the Perspective of Institutional, Real Options, and Stewardship Theories

Dibrell, C. — Wed, 13 May 2009 12:22:29 PDT

As families seek alternative forms of financial capital without putting the family business at risk, life settlements are gaining the interest of family businesses and scholars. This commentary draws upon institutional theory, real options theory, and stewardship theory to provide a foundation to better understand life settlements and to complement the work articulated by Adams (2009 [this issue]).