This study analyzes the determinants of a person`s intention to start a new business involving family members. Based on the perspective of family integration, we hypothesize that there is an inverse U-shaped relationship between the number of people in a family household and the intention to start a family business. Moreover, we argue that this relationship is moderated by household income and the individual`s level of education. With supporting empirical results based on data from Mexico`s Global Entrepreneurship Monitor (GEM), our work contributes to the study of family integration and entrepreneurial career intentions by identifying the importance of household-level factors in family business start-up decisions and presenting this decision as a distinct career option in terms of self-employment. Eddleston, K.A. and Kellermanns, F.W. (2007), « Destructive and productive family relationships: a stewardship theory perspective », Journal of Business Venturing, vol. 22, no 4, p. 545-565. Osgood, C.E. (1964), « Semantic differential technique in the comparative study of cultures », American Anthropologist, vol. 66, no 3, p. 171 à 200.
Carney, M. (2005), « Corporate governance and competitive advantage in family-controlled companies », Entrepreneurship Theory and Practice, vol. 29, no 3, p. 249 à 265. Bianco, M., Golinelli, R. et Parigi, G. (2009), « Family firms and investments », Finance Working Paper, vol. 269, ECGI.
Pour les entreprises familiales, les acquisitions sont un outil stratégique pour étendre la position d’une entreprise sur le marché ou ouvrir de nouvelles opportunités commerciales (Feito-Ruiz & Menãndez-Requejo©, 2011). Industry relationship is a methodology commonly used in the literature to analyze the management logic behind M&A activities, as it involves different management reasons (Defrancq et al., 2016; Gomez-Mejia et al., 2015; Miller et al., 2010). Family businesses are driven by industry-related acquisitions by family members, although they may differ in age, gender, education and other demographic characteristics, generally sharing the same values and visions (Chua et al., 2003). This implies that they have a higher level of trust and affinity for each other and a higher level of cohesion (Ensley & Pearson, 2005). In addition, TMT family members maintain long-term interpersonal relationships and, if they are accustomed to freely expressing their opinions within the family, can work in an atmosphere that facilitates information sharing and promotes high-quality strategic decisions. These aspects, in turn, promote the company`s performance. The performance of companies is influenced by the quality of decision-making, the implementation of which requires consensus. It is inherently easier to reach consensus among family members because consensus is facilitated by similar backgrounds (Knight et al., 1999).
TMT family members also tend to share responsibility and have an accommodating attitude towards other family members (reciprocity) for the “good” of the team. They have closer relationships and are loyal to the management of the company because of the altruistic nature of the family (Eddleston & Kellermanns, 2007). This form of altruism is considered a family business resource that has a positive impact on business performance (Eddleston et al., 2008) when family managers prefer decisions that improve the profitability of the business (Minichilli et al., 2010). Based on these arguments, we hypothesize the following: Hansen, C. and Block, J. (2020), “Exploring the relation between family involvement and firms` financial performance: a replication and extension meta-analysis”, Journal of Business Venturing Insights, vol. 13, e00158. In Model 1, we show the direct impact of family TMTs on firm performance.
The relationship between familial TMT and ROE is positive and significant (β = 0.448, p < 0.05), i.e. Returns on equity are higher when more family members are on TMT, supporting hypothesis 1. Model 2 shows the effects of family TMT on M&A propensity (β = 0.317, p < 0.05). The results show that there is a positive relationship. In other words, family businesses show a greater propensity for mergers and acquisitions when the proportion of family members in TMT is higher. Finally, in Model 3, we test the mediating role of mergers and acquisitions in the relationship between family, TMTs and performance. With respect to mediation, Baron and Kenny (1986) argue that if the initial contribution of one independent variable is reduced or replaced by another independent variable, the second independent variable would mediate the dependent variable. Model 3 declines return on equity on family-owned TMTs and mergers and acquisitions. The results highlight the mediating role of M&A and support hypothesis 2.
In other words, when the M&A variable is added to the main effects, the direct effect of family TMT on ROE decreases its importance (β=0.356, p < 0.10), indicating the partial mediation role of mergers and acquisitions, according to Baron and Kenny (1986). Our empirical study sheds light on the decisive heterogeneity characteristics of family businesses that influence acquisition decisions with respect to industry linkages. In particular, we examined the impact of family ownership, family involvement in the management team, and their interrelationship between stages of the family business life cycle. To examine family business decision-making, we used a manually collected dataset, based on Zephyr and Amadeus, of 404 strategic acquisitions made between 2010 Mazzola, P., Sciascia, S. and Kellermanns, F.W. (2013), "Non-linear effects of family sources of power on performance", Journal of Business Research, Vol. 66, No. 4, pp. 568-574. Randøy, T., Dibrell, C. and Craig, J.
(2009), “Founding family leadership and industry profitability”, Small Business Economics, Vol. 32, No. 4, pp. 397-407. Ahuja, G. and Katila, R. (2001), “Technological acquisitions and the innovation performance of acquiring firms: a longitudinal study”, Strategic Management Journal, Vol. 22, No. 3, pp. 197-220.
In addition, by performing a robustness test, we determined that the moderating mediation effect remains. The results obtained by considering ROA as the main dependent variable and the average ROE recorded from 2006 to 2010 as the moderating variable are consistent with those presented in the main model and suggest the existence of a positive relationship between family TMT and ROA, partly mediated by mergers and acquisitions. In addition, applying the normal theory standard and priming techniques (500 replications), we again found that conditional indirect effects slowly decrease as the value of the moderating variable increases. In other words, even when modifying the metrics selected to measure performance, we point out that a TMT with a higher percentage of family members shows a higher propensity for mergers and acquisitions, which has a positive impact on performance when performance feedback is worse. Finally, the results obtained by examining the presence of family members in TMT (family-TMT (presence)) as the most important independent variable (dummy variable) indicated that this variable does not significantly affect mergers and acquisitions or performance (ROE), which shows that we cannot limit the analysis to the “presence” (or not) of family members in TMT, but it is better to take into account the “percentage” of family members sitting on the TMT. We consider the propensity to M&A to be a good indicator of a strategic decision, as it implies that specific decisions regarding business growth must be made by the high-level management of an organization. This strategic decision may take a particular note in the context of the family business more than other strategic decisions, as family businesses are generally considered risk-averse, so this type of strategic decision has often been discarded and has not been considered relevant in this context. Nevertheless, this type of growth strategy is also receiving increasing attention in family businesses, as evidenced by the recent call for more research on the subject (Gómez-Mejía et al., 2018). Since M&A activities are very risky and challenging for family businesses due to the need for financial resources, viewing them as an explanatory (intermediate) construct of the relationship between family ownership and business performance could further illuminate the aversion/inclination towards at-risk family members sitting in the TMT. Bammens, Y., Voordeckers, W. and Van Gils, A. (2008), “Boards of directors in family companies: a generational perspective”, Small Business Economics, Bd.
31 Nr. 2, S. 163-180. Chua, J.H., Chrisman, J.J. und Sharma, P. (2003), “Succession and nonsuccession concerns of family firms and agency relationship with nonfamily managers”, Family Business Review, Vol.