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Family Involvement and Sustainable Family Business: Analysing Their Effects on Diversification Strategies

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  • Ines Herrero

    (Business Management and Marketing, University Pablo de Olavide, Ctra. de Utrera Km. 1. Dep, 41013 Sevilla, Spain)

Abstract

Recent studies have noted that traditional agency theory and risk attitudes differ when firms are small and have a family character. In this work, we provide new insights with respect to the effect that the family role and the different types of risk exert on diversification strategies. We provide a different view on the effect that the number of generations and having a family manager exert on diversification attitudes and we analyse the concept of family involvement for small family firms and the moderating role it has in the relationship between the different types of risk and diversification decisions. By using a behavioural model analysis and a set of fishing firms to test our hypotheses, our results corroborate the importance of family variables on the behaviour of small family firms and how these firms avoid risk under certain stable conditions while take riskier decisions when sustainability and survivability is menaced by unstable environments. We not only provide theoretical reasons that help to the understanding of diversification decisions of small family firms but we also draw some specific conclusions that will help fishery managers to achieve more sustainable fisheries by a better understanding of fishers behaviours.

Suggested Citation

  • Ines Herrero, 2017. "Family Involvement and Sustainable Family Business: Analysing Their Effects on Diversification Strategies," Sustainability, MDPI, vol. 9(11), pages 1-20, November.
    • Handle: RePEc:gam:jsusta:v:9:y:2017:i:11:p:2099-:d:118995
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    References listed on IDEAS

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