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Top Management Team Heterogeneity and Investment Decisions in Family-Owned Firms

Author

Listed:
  • Chih-Wei Peng
  • Yao-Ying Liu
  • Ya-Chen
  • Chen

Abstract

This research attempts to extend the literature by analyzing the potential relationship between top management team (TMT) compositional heterogeneity and investment efficiency in family-owned firms in an emerging market. The TMT compositional heterogeneity data used in this study were hand-collected from Taiwanese listed companies between 2009 and 2015. The results indicate that TMT compositional heterogeneity can mitigate inefficient investment in family-owned firms. Specifically, greater heterogeneity within the TMT helps such firms avoid inefficient investments and better address potential threats to their long-term viability. Taiwanese family-owned firms are predominantly small and medium-sized enterprises (SMEs), which exhibit characteristics that differ from those of larger firms commonly studied in U.S. and European contexts. This study therefore extends prior research by examining, for the first time, whether TMT compositional heterogeneity in an emerging market is associated with the relative efficiency of firms’ investment strategies. JEL classification numbers: G11, D61, J12.

Suggested Citation

  • Chih-Wei Peng & Yao-Ying Liu & Ya-Chen & Chen, 2026. "Top Management Team Heterogeneity and Investment Decisions in Family-Owned Firms," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 16(3), pages 1-1.
    • Handle: RePEc:spt:apfiba:v:16:y:2026:i:3:f:16_3_1
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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