Strings attached: Socioemotional wealth mixed gambles in the cash management choices of family firms

Yulia Ponomareva .

doi:10.1016/j.jfbs.2021.100466

Strings attached: Socioemotional wealth mixed gambles in the cash management choices of family firms

Yulia Ponomareva .^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › Research › peer-review

6 Citations (Scopus)

Abstract

Family owners differ from other types of owners due to the presence of socioemotional wealth (SEW) concerns. We take a closer look at this distinctive aspect by examining the impact of family control and influence dimension of SEW on the cash management choices of family firms, conceptualizing it as a mixed gamble choice. Our empirical analysis of 195 Italian firms listed on the Milan Stock Exchange between 2003 and 2015 shows that family firms derive more value and incur lower costs than nonfamily firms when they increase their cash holdings. We then delve deeper into family firms’ cash management choices by exploring how different levels of family control and influence as well as types of board governance arrangements moderate this relationship. The empirical results indicate that the positive effects of family ownership are more pronounced under a high level of family control and influence and with separation of the board chair and CEO positions.

Original language	English
Journal	Journal of Family Business Strategy
DOIs	https://doi.org/10.1016/j.jfbs.2021.100466
Publication status	Published - 1 Oct 2021

Keywords

Boards of directors
Cash holdings
Corporate governance
Mixed gamble
SEW

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10.1016/j.jfbs.2021.100466

https://ddd.uab.cat/record/250603

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title = "Strings attached: Socioemotional wealth mixed gambles in the cash management choices of family firms",

abstract = "Family owners differ from other types of owners due to the presence of socioemotional wealth (SEW) concerns. We take a closer look at this distinctive aspect by examining the impact of family control and influence dimension of SEW on the cash management choices of family firms, conceptualizing it as a mixed gamble choice. Our empirical analysis of 195 Italian firms listed on the Milan Stock Exchange between 2003 and 2015 shows that family firms derive more value and incur lower costs than nonfamily firms when they increase their cash holdings. We then delve deeper into family firms{\textquoteright} cash management choices by exploring how different levels of family control and influence as well as types of board governance arrangements moderate this relationship. The empirical results indicate that the positive effects of family ownership are more pronounced under a high level of family control and influence and with separation of the board chair and CEO positions.",

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AB - Family owners differ from other types of owners due to the presence of socioemotional wealth (SEW) concerns. We take a closer look at this distinctive aspect by examining the impact of family control and influence dimension of SEW on the cash management choices of family firms, conceptualizing it as a mixed gamble choice. Our empirical analysis of 195 Italian firms listed on the Milan Stock Exchange between 2003 and 2015 shows that family firms derive more value and incur lower costs than nonfamily firms when they increase their cash holdings. We then delve deeper into family firms’ cash management choices by exploring how different levels of family control and influence as well as types of board governance arrangements moderate this relationship. The empirical results indicate that the positive effects of family ownership are more pronounced under a high level of family control and influence and with separation of the board chair and CEO positions.

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Strings attached: Socioemotional wealth mixed gambles in the cash management choices of family firms

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Keywords

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