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Family businesses in Eastern European countries: How informal payments affect exports

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  • Bassetti, Thomas
  • Dal Maso, Lorenzo
  • Lattanzi, Nicola

Abstract

This article investigates the effect of corruption on the export share of family firms in Eastern European countries. Using the Business Environment and Enterprise Performance Survey and panel data methods, we find that, in contrast to non-family firms, family firms are rather sensitive to corruption. In particular, the export share of family firms is positively associated with informal payments that aim to facilitate business operations. There are at least three compelling explanations for these results. First, if family firms are more risk averse than non-family firms, informal payments may represent additional export risk insurance. Second, informal payments may help family firms compensate for the lack of managerial capabilities to export. Finally, when institutional inefficiencies obstruct business, corruption may be a tool for family firms to protect their socioemotional wealth.

Suggested Citation

  • Bassetti, Thomas & Dal Maso, Lorenzo & Lattanzi, Nicola, 2015. "Family businesses in Eastern European countries: How informal payments affect exports," Journal of Family Business Strategy, Elsevier, vol. 6(4), pages 219-233.
  • Handle: RePEc:eee:fambus:v:6:y:2015:i:4:p:219-233
    DOI: 10.1016/j.jfbs.2015.07.004
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    1. Jing Zhao & Michael Carney & Shubo Zhang & Limin Zhu, 2020. "How does an intra-family succession effect strategic change and performance in China’s family firms?," Asia Pacific Journal of Management, Springer, vol. 37(2), pages 363-389, June.
    2. Carney, Michael & Duran, Patricio & van Essen, Marc & Shapiro, Daniel, 2017. "Family firms, internationalization, and national competitiveness: Does family firm prevalence matter?," Journal of Family Business Strategy, Elsevier, vol. 8(3), pages 123-136.
    3. Mikel Alayo & Txomin Iturralde & Amaia Maseda & Gloria Aparicio, 0. "Mapping family firm internationalization research: bibliometric and literature review," Review of Managerial Science, Springer, vol. 0, pages 1-44.
    4. Stough, Roger & Welter, Friederike & Block, Joern & Wennberg, Karl & Basco, Rodrigo, 2015. "Family business and regional science: “Bridging the gap”," Journal of Family Business Strategy, Elsevier, vol. 6(4), pages 208-218.
    5. William Murithi & Natalia Vershinina & Peter Rodgers, 2020. "Where less is more: institutional voids and business families in Sub-Saharan Africa," Post-Print hal-02456668, HAL.
    6. Debellis, Francesco & Rondi, Emanuela & Plakoyiannaki, Emmanuella & De Massis, Alfredo, 2021. "Riding the waves of family firm internationalization: A systematic literature review, integrative framework, and research agenda," Journal of World Business, Elsevier, vol. 56(1).
    7. Zizi Goschin & Elena Druică & Călin Vâlsan, 2020. "Shaped by location? A spatial panel analysis of Romanian family businesses," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(5), pages 893-911, October.

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    More about this item

    Keywords

    Informal payments; Family business; Company export orientation; Eastern European economies;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P2 - Economic Systems - - Socialist Systems and Transition Economies

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