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New Insights On Economic Theories Of The Family Firm, James J. Chrisman, Chevy-Hanqing Fang, Silvio Vismara, Zhenyu Wu
New Insights On Economic Theories Of The Family Firm, James J. Chrisman, Chevy-Hanqing Fang, Silvio Vismara, Zhenyu Wu
Business and Information Technology Faculty Research & Creative Works
Research attention to family firms has significantly increased in recent years, with a growing application of economic theories such as agency theory and resource-based theory to explain differences between family firms and nonfamily firms and heterogeneity among family firm populations. Despite this progress, the formulation of an economic theory of family business remains notably absent. Merely applying existing economic theories of the firm to the realm of family business is inadequate, as these general theories fail to incorporate the idiosyncratic aspects of family firms, such as the pursuit of socioemotional wealth. This paper seeks to advance economic theories specific to …
Do Nonfamily Managers Enhance Family Firm Performance?, Chevy-Hanqing Fang, James J. Chrisman, Joshua J. Daspit, Kristen Madison
Do Nonfamily Managers Enhance Family Firm Performance?, Chevy-Hanqing Fang, James J. Chrisman, Joshua J. Daspit, Kristen Madison
Business and Information Technology Faculty Research & Creative Works
Prior studies find that nonfamily managers enhance family firm performance, yet other studies note that family firms have difficulty attracting high-quality nonfamily managers, often settling for average-quality nonfamily managers. Given these findings, how is it possible that average-quality nonfamily managers enhance family firm performance? We address this paradox by theorizing that lower-performing, rather than higher-performing, family firms are more likely to benefit from employing nonfamily managers. Using a sample of 324 small family firms, we find that family firms with below-average performance significantly benefit from employing nonfamily managers, whereas family firms with above-average performance do not experience the same benefit. …