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Family Involvement In Chinese And German Small Businesses

Author

Listed:
  • ANTJE SCHMITT

    (Department of Business Psychology, University of Kassel, Nora-Platiel-Str. 5, 34109 Kassel, Germany)

  • MICHAEL FRESE

    (Department of Management and Organisation, NUS Business School, 15 Kent Ridge Drive, Singapore 119245, Singapore)

Abstract

The goal of this study was to examine cultural differences in the value of family involvement in German and Chinese small businesses due to their differences in collectivism/individualism. Our analyses, based on a sample of 562 Chinese and German owners, showed that family involvement — measured as the number of family members that work in the business — is higher in China than in Germany. Compared to German business owners, Chinese owners received most of their start-up capital from family members. Moreover, we were interested in whether family involvement is related to the business owner's ability to make use of start-up capital to turn it into business outcomes. Building on existing literature and based on the match hypothesis we hypothesized that the effects of family involvement on business outcomes depend on the cultural values underlying a business. Our analyses revealed that family involvement negatively affected relationships of start-up capital with business outcomes both in China and in Germany. Our study contributes by showing that a negative effect of family involvement on the ability to make use of start-up capital is not only evident in individualistic cultures such as Germany but does also apply to collectivistic Chinese businesses. Practically, owners in both cultures are suggested to develop strategies in order to prevent and overcome negative effects of family involvement on business outcomes. Our results suggest fruitful avenues for future research.

Suggested Citation

  • Antje Schmitt & Michael Frese, 2011. "Family Involvement In Chinese And German Small Businesses," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 19(03), pages 261-285.
    • Handle: RePEc:wsi:jecxxx:v:19:y:2011:i:03:n:s0218495811000775
    DOI: 10.1142/S0218495811000775
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    Cited by:

    1. Bornhausen, Anna Maria, 2022. "Conceptualizing cross-country analyses of family firms: A systematic review and future research agenda," International Business Review, Elsevier, vol. 31(4).
    2. Manolova, T. & Shirokova, G. & Tsukanova, T. & Edelman, L., 2014. "The impact of family support on young nascent entrepreneurs's start-up activities: A family embeddedness perspective," Working Papers 6381, Graduate School of Management, St. Petersburg State University.

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