IDEAS home Printed from https://ideas.repec.org/a/taf/ujbmxx/v55y2017i4p632-648.html

Industry and Information Asymmetry: The Case of the Employment of Non‐Family Managers in Small and Medium‐Sized Family Firms

Author

Listed:
  • Hanqing “chevy” Fang
  • Esra Memili
  • James J. Chrisman
  • Christopher Penney

Abstract

As family firms begin to professionalize, they face an important crossroads in deciding whether to employ non‐family managers. To preserve socioemotional wealth and minimize agency costs, family owners may resist employing non‐family managers. However, industry sector may play a role that influences the employment of non‐family managers. We argue that the family's reluctance will be stronger in industries where information asymmetries make monitoring managers more difficult. For industries where monitoring is easier, the benefits of employing non‐family managers may offset the loss in socioemotional wealth and increase in agency costs. Results based on a sample of 965 small and medium‐sized retail and manufacturing firms confirm our predictions.

Suggested Citation

  • Hanqing “chevy” Fang & Esra Memili & James J. Chrisman & Christopher Penney, 2017. "Industry and Information Asymmetry: The Case of the Employment of Non‐Family Managers in Small and Medium‐Sized Family Firms," Journal of Small Business Management, Taylor & Francis Journals, vol. 55(4), pages 632-648, October.
    • Handle: RePEc:taf:ujbmxx:v:55:y:2017:i:4:p:632-648
    DOI: 10.1111/jsbm.12267
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/jsbm.12267
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1111/jsbm.12267?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Giorgia Maria D’Allura, 2025. "Exploring Family in Service Business Succession: Uncovering the Gap to Provide a Research Agenda," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 34(4), pages 741-771, November.
    2. Lai Deng & Ke Liu, 2025. "Intergenerational succession and opportunistic behavior of non-family executives: evidence from China," Review of Managerial Science, Springer, vol. 19(9), pages 2667-2696, September.
    3. Chakraborty, Sumit & Singla, Chitra, 2025. "Navigating international entry via strategic alliances: Comparison of family and non-family firms," Journal of International Management, Elsevier, vol. 31(3).
    4. Natalie Welch & Jan-Philipp Ahrens & Joern Block, 2025. "Regional labor market integration of women and the share of women in management: are family firms different?," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 45(1), pages 153-183, March.
    5. Ine Umans & Maarten Corten, 2023. "Ownership succession intentions affecting earnings management in private family firms," Small Business Economics, Springer, vol. 61(2), pages 827-842, August.
    6. Marco Mismetti & Ivan Miroshnychenko & Alfredo De Massis, 2026. "Family firms and sustainable development goals: the role of ownership, management, and country progress," Review of Managerial Science, Springer, vol. 20(4), pages 1387-1417, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:ujbmxx:v:55:y:2017:i:4:p:632-648. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/ujbm .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.