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The influence of national culture and institutional voids on family ownership of large firms: A country level empirical study

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  • Chakrabarty, Subrata

Abstract

There is considerable variation across countries in both the extent to which large publicly listed firms are family-owned and the dominance of such family-owned firms in stock markets. The literature presents competing theoretical viewpoints on what influences such country-level variation. On one hand, institutional economists suggest that institutional voids can have a strong influence. On the other hand, cultural sociologists suggest that a country's culture can have a strong influence. One type of institutional void is a lack of institutional norms and regulations needed for monitoring contracts (which can discourage owners from hiring professional agents for top management positions in their firms) and another type of institutional void is a lack of financial credit availability in the country. Cultural dimensions include collectivism (i.e. cohesion within in-groups/families) and power distance (i.e. inequalities in society). This country-level empirical study suggests that both national culture and institutional voids influence family ownership patterns around the world, and that institutional voids moderate the influence of national culture. National culture has a stronger influence when a country has institutional voids; however, the influence of national culture weakens when institutional voids are overcome.

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  • Chakrabarty, Subrata, 2009. "The influence of national culture and institutional voids on family ownership of large firms: A country level empirical study," Journal of International Management, Elsevier, vol. 15(1), pages 32-45, March.
  • Handle: RePEc:eee:intman:v:15:y:2009:i:1:p:32-45
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    Cited by:

    1. Valentina Marano & Peter Tashman & Tatiana Kostova, 2017. "Escaping the iron cage: Liabilities of origin and CSR reporting of emerging market multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(3), pages 386-408, April.
    2. Sonia Ketkar & Zoltán J. Ács, 2015. "Where Angels Fear to Tread: Internationalization of Emerging Country SMEs," Chapters,in: Global Entrepreneurship, Institutions and Incentives, chapter 22, pages 423-441 Edward Elgar Publishing.
    3. Taras, Vas & Steel, Piers & Kirkman, Bradley L., 2012. "Improving national cultural indices using a longitudinal meta-analysis of Hofstede's dimensions," Journal of World Business, Elsevier, vol. 47(3), pages 329-341.
    4. Kato, Masae & Sleeboom-Faulkner, Margaret, 2011. "Dichotomies of collectivism and individualism in bioethics: Selective abortion debates and issues of self-determination in Japan and 'the West'," Social Science & Medicine, Elsevier, vol. 73(4), pages 507-514, August.
    5. Sousa, Cátia & Gonçalves, Gabriela & Cunha, Miguel, 2015. "Cultural Values As A Support To The Development Of Intercultural Competences," Spatial and Organizational Dynamics Discussion Papers 2015-1, CIEO-Research Centre for Spatial and Organizational Dynamics, University of Algarve.
    6. Sadok El Ghoul & Omrane Guedhami & Yongtae Kim, 2017. "Country-level institutions, firm value, and the role of corporate social responsibility initiatives," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(3), pages 360-385, April.
    7. Subrata Chakrabarty & A. Erin Bass, 2015. "Comparing Virtue, Consequentialist, and Deontological Ethics-Based Corporate Social Responsibility: Mitigating Microfinance Risk in Institutional Voids," Journal of Business Ethics, Springer, vol. 126(3), pages 487-512, February.
    8. repec:spr:manint:v:55:y:2015:i:5:d:10.1007_s11575-015-0253-8 is not listed on IDEAS
    9. repec:eee:worbus:v:53:y:2018:i:2:p:134-150 is not listed on IDEAS
    10. Erkut Altindag & Cemal Zehir & A. Acar, 2011. "Strategic Orientations and Their Effects on Firm Performance in Turkish Family Owned Firms," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 1(1), pages 18-36, June.
    11. repec:spr:intemj:v:14:y:2018:i:1:d:10.1007_s11365-017-0455-6 is not listed on IDEAS
    12. Lewellyn, Krista B. & Bao, Shuji ‘Rosey’, 2015. "R&D Investment in the Global Paper Products Industry: A Behavioral Theory of the Firm and National Culture Perspective," Journal of International Management, Elsevier, vol. 21(1), pages 1-17.
    13. Subrata Chakrabarty & Liang Wang, 2012. "The Long-Term Sustenance of Sustainability Practices in MNCs: A Dynamic Capabilities Perspective of the Role of R&D and Internationalization," Journal of Business Ethics, Springer, vol. 110(2), pages 205-217, October.
    14. Kothari, Tanvi & Lahiri, Somnath, 2012. "Yesterday, today and tomorrow: An overview of research publications in the Journal of International Management," Journal of International Management, Elsevier, vol. 18(1), pages 102-110.
    15. Subrata Chakrabarty, 2015. "The Influence of Unrelated and Related Diversification on Fraudulent Reporting," Journal of Business Ethics, Springer, vol. 131(4), pages 815-832, November.
    16. Salzmann, Astrid & Soypak, Kalender, 2017. "National culture and private benefits of control," Finance Research Letters, Elsevier, vol. 20(C), pages 199-206.
    17. Tine Lehmann & Maximilian Benner, 2015. "Cluster Policy in the Light of Institutional Context—A Comparative Study of Transition Countries," Administrative Sciences, MDPI, Open Access Journal, vol. 5(4), pages 1-25, October.
    18. Bowo Setiyono & Amine Tarazi, 2014. "Does the presence of institutional investors in family banks affect profitability and risk? Evidence from an emerging market," Working Papers hal-01077118, HAL.
    19. Mahdieh Nor Ali Ahari & Mohammad Jalili, 2016. "Comparison of Accounting Earnings Informativeness in Family and NonFamily Firms Listed In Tehran Stock Exchange," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 6(3), pages 110-118, July.
    20. Yi Jiang & Mike Peng, 2011. "Are family ownership and control in large firms good, bad, or irrelevant?," Asia Pacific Journal of Management, Springer, vol. 28(1), pages 15-39, March.
    21. Subrata Chakrabarty & A. Bass, 2014. "Institutionalizing Ethics in Institutional Voids: Building Positive Ethical Strength to Serve Women Microfinance Borrowers in Negative Contexts," Journal of Business Ethics, Springer, vol. 119(4), pages 529-542, February.
    22. repec:eee:reveco:v:51:y:2017:i:c:p:82-98 is not listed on IDEAS

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