Txomin Iturralde

Empirical evidence of banking relationships for Spanish SMEs

Theoretical papers on banking relationships have focused on how the strength of a bank—firm relationship affects the design of credit agreements. In empirical studies, the number of bank relationships has been often used as a proxy for the strength of the bank—firm relationship. Any analysis of bank—firm relationships must also include a study of the reasons why a particular bank is selected. This means identifying the most significant decision-making variables concerned with such contracting. In this article, we examine the determinants of the number of banking relationships and the factors that influence the choice of banks in a sample of small and medium-sized firms. The reference to SME firms is very useful, since SMEs are highly dependent on banking finance to undertake their projects. The results provide some evidence in support of the idea that, for SMEs, the size of the firm, age, leverage and financial cost have significant links with the number of banking relationships. On the other hand, the results confirm the tendency for qualitative aspects to become determining factors in the choice of financial institutions.

Impact of Outsiders on Firm Performance Over Different Generations of Family‐Owned SMEs

From the perspective of agency, resource‐based view, and resource‐dependence theories, we explore the impact of the presence of outside directors on firm performance in family small and medium‐sized enterprise (). Using survey data from 369 panish family , our findings show an inverted ‐shaped relationship between the proportion of outsiders on the boards of first‐ and second‐generation family firms and firm performance. The results show that a balanced presence of outside directors contributes to value creation in family and confirm that the composition and the roles of the board of directors differ from generation to generation in family firms.

Is non-family social capital also (or especially) important for family firm performance?

This article reports on a study investigating the effects of both family and non-family social capital on firm performance. Specifically, we contend that non-family social capital has a stronger effect on firm performance than family social capital and it also serves as a mediator between family social capital and firm performance. Using a sample of 172 Spanish family firms that includes two respondents per firm, we test a structural model that confirms our hypotheses. Our results extend the understanding of social capital beyond family firms by exploring both family- and non-family-based social relationships in a context in which social factors are predominant.

Treasury Management Versus Cash Management

Using a database of Spanish companies, this paper analyses the treasury management responsibilities assumed by financial departments and develops a model to confirm those responsibilities. We have developed an explanatory model that brings together the main functions of the treasurer by means of two concepts: (i) basic cash management, which groups the management of collections and payments, liquidity monitoring in banking operations, short-term treasury forecasts, the management of banking balances on value date and negotiation with financial organizations; and (ii) advanced cash management, which includes the management of the financing of treasury deficits, the management of the positioning of treasury peaks and the management of financial risks. In this way, the definition of cash management is empirically corroborated.

The influence of family and non–family social capital on firm innovation: exploring the role of family ownership

Using a sample of 172 Spanish family firms this study explores whether the effect of family and non–family social capital on family firm innovation is contingent on family ownership. We test a structural model that explores whether the relationship between family and non–family social capital with family firm innovation is moderated by family ownership. We use partial least squares structural equation modelling to test our hypotheses. Our results extend the understanding of innovation within family firms, which are characterised by nuanced social and affective behaviours.

Corporate Control and Generational Phase in Family SMEs

This paper provides new evidence on the way in which ownership influences firm value. We analyze the effect of the insider ownership on firm performance in family SMEs, highlighting the generational effect using data on 336 non-listed Spanish family SMEs. For this purpose we have distinguished between first, second and subsequent generation family firms. Our results support the convergence of interest and entrenchment hypothesis on the relationship between firm performance and insider ownership in family firms. The performance of family firms grows with low and high levels of insider ownership and falls in the intermediate levels. Results depend on which generation runs the firm.

Ownership Structure, Insiders Ownership and Firm Performance in Spanish Non-Listed Firms

This study provides new evidence on the way in which ownership concentration and insider ownership influence non-listed firms performance, differentiating the behaviour of family and non-family firms using data on 586 non-listed Spanish firms. The empirical evidence shows that for family firms the relationship between ownership concentration and firm performance differs depending on which generation manages the firms. Confirmation is found of the monitoring effect and also the expropriation effect for the very highest ownership concentration in non-listed Spanish family firms. Concerning insider ownership, our evidence supports both the convergence of interest and the entrenchment effects, and suggests that Spanish family firms’ insiders become entrenched at higher ownership levels.

Entrepreneurial orientation in family firms: New drivers and the moderating role of the strategic involvement of the board

In this study, we examine new drivers that generate a disposition toward entrepreneurial activity in family firms and how the strategic involvement of the board of directors (SIBD) moderates the relationships between these drivers (image of the firm, willingness to change, and access to financial resources) and entrepreneurial orientation (EO). Using a sample of 230 family small and medium-sized enterprises (SMEs), our results confirm that a good family firm image and willingness to change may be powerful tools that stimulate a firm to develop entrepreneurial activities. The negative relationship between access to financial resources and EO may relate to the false belief that financial resources help firms be more creative and to maintaining family control of the firm and the socioemotional endowment. Contrary to our expectations, we also find that the SIBD negatively influences the relationship between the above drivers and EO, pointing to the need for more open boards of directors in family SMEs in order to develop and implement entrepreneurial strategies. JEL Classification: L2, M1

Why Do Some Boards of Directors in Family Firms Outperform Others When Strategizing? Analysing the Importance of Entrepreneurial Orientation

The strategic role of the board of directors can be a competitive advantage for family firms. In fact, in medium-sized family firms the more the board is involved in the firm strategy, the better performance it gets. However, this relationship is mediated by some variables that may enhance or inhibit this effect. In this chapter, the impact of the entrepreneurial orientation variable is analysed as a mediator between the strategic involvement of the board of directors (SIBD) and performance. We test these hypotheses by surveying the CEOs of 230 Spanish medium-sized family businesses. The results obtained through the Partial Least Square (PLS) technique show that the entrepreneurial orientation of the family firm has a positive effect on the relationship between SIBD and performance.

Entrepreneurial Orientation and Innovation in a Context of Crisis: Some Relevant Factors in the Case of Family Firms

This article analyses how some internal factors inherent to family firms influence the entrepreneurial orientation (EO) of small-and-medium (SME) family businesses, which are the most successful type of firms in maintaining jobs in a crisis like the present. In this sense, we predict that a family firm’s image, its willingness to change, and the strategic involvement of its board of directors may positively influence its EO, which is one of the most used strategies among firms against crisis. We test these hypotheses by surveying the CEOs of 232 Spanish SMEs. The results of a structural equation model corroborate our hypotheses.