Erick P.C. Chang

Are Family Firms Born or Made? An Exploratory Investigation

Do businesses tend to be born as family firms or do they become family firms at a later stage in their development? The question has important implications for family business studies. In this article we examine this question using data extracted from survey responses of small business clients of the Small Business Development Center (SBDC) program in the United States. The results suggest that most family firms are born that way but that a significant number of firms do arrive there through time. The relationship between age and family involvement appears to be concave—the rate of increase in family involvement slows as family firms become older and at some point family involvement may even decline.

Family Social Capital, Venture Preparedness, and Start-Up Decisions A Study of Hispanic Entrepreneurs in New England

Using insights from the resource-based view, social capital, and network theories, the authors develop a model of how family social capital, as well as an entrepreneur’s knowledge capital and external social capital, influences the venture creation process. The model is tested on a sample of 85 nascent Hispanic entrepreneurs. Results indicate that family social capital, measured as family support, contributes to venture preparedness and the start-up decision, suggesting that it has both a direct and an indirect influence on venture creation.

Regional Economy as a Determinant of the Prevalence of Family Firms in the United States: A Preliminary Report

The formation of family firms, as well as their scale and scope, is likely to be influenced by the characteristics of the environment. This study presents preliminary findings on the relationship between economic development and the prevalence of family vs. nonfamily firms in the United States. We use three samples consisting of 15,918 firms aggregated at the state level and two methods of estimating the proportion of family businesses in each state. Our results indicate that regardless of the method of estimation, there is a negative relationship between the proportion of family firms in a state and gross state product per capita. Implications and research directions are provided.

The propensity to use incentive compensation for non‐family managers in SME family firms

Purpose – The purpose of this paper is to use the socio‐emotional wealth perspective to examine how the level of family involvement reduces the propensity to use incentives to non‐family managers in small to medium‐sized enterprises (SME) family firms.Design/methodology/approach – Primary data were collected from US firms. To evaluate the hypotheses, a logit model was employed on a final sample of 2,019 small family firms.Findings – Results suggest that family influence and control and intra‐family transgenerational succession intentions are negatively related to the propensity to use incentives. Also, the interaction effects of family management and ownership reduce the propensity to use incentives.Originality/value – The paper’s empirical findings imply that despite their potential economic benefits, family involvement reduces the probability that incentives will be offered to non‐family managers because such incentives are perceived to be inconsistent with the preservation of the family’s socioemotiona...

Role conflicts of family members in family firms

The existence of role conflict among organizational members tends to create tensions inside organizations worldwide. However, in the context of family firms, having a dual role of being a member of a family and a member of the firm can represent interesting differences that make family firms an important form of organization to study. Following the tenets of the stewardship theory, our article develops a model where reciprocal altruism represents an antecedent to role conflict among family members. We further argue that perceptions of collective efficacy among family members have a moderating effect on the relationship between reciprocal altruism and role conflict. Last, we propose that role conflict in family firms reduces the family firm performance. Implications for future research and practice are discussed.

EXPANDING THE NOTION OF ENTREPRENEURSHIP CAPITAL IN AMERICAN COUNTIES: A PANEL DATA ANALYSIS 2002–07

Entrepreneurship capital refers to the factors of a region that drives new businesses (Audretsch and Keilbach, 2004). This study considers industry growth and performance in manufacturing, retail and service as components of entrepreneurship capital to drive the long-term growth of new establishments. Using a panel data of 2,940 counties from 2002–2007, our results support the notion that the overall new venture activity is benefited by the industry growth and performance. Future research directions and practical implications are also discussed.

The Most Influential Family Business Articles from 2006 to 2013 Using Five Theoretical Perspectives

In this chapter, we highlight and review the most frequently cited articles that have influenced family business research between 2006 and 2013 from the five most commonly adopted theoretical perspectives: agency theory, resource-based view, stewardship theory, socioemotional wealth, and institutional theory. Using citation counts from Google Scholar, we identified 21 articles that covered these perspectives. Our review discusses the contributions of these highly cited articles, particularly in terms of understanding family firm heterogeneity. We conclude the chapter by suggesting future research directions using these and other theoretical perspectives.