Pan-Pacific Conference XXXIV. Designing New Business Models in Developing Economies

More documents

Recommendations

Info

Financial Performance of Family Businesses with Corporate Governance Practices of the Ownership Betancourt, José B. DBA student, Centrum Graduate Business School, Pontificia Universidad Católica, Perú and Maastricht School of Management, Netherlands jose.betancourt@pucp.pe Introduction This research proposal aims to explain the influence of ownership governance practices on the financial performance of family business (FB), in order to promote the implementation of the most relevant practices and prioritize efforts of FB. Corporate governance codes and national legislation promote a large number of governance practices, but in FB is necessary to identify those that most influence its financial performance, in order that shareholders focus their efforts. The question that leads this research is: To what extent do corporate governance practices of ownership influence the financial performance of Colombian´ FB? Literature Review 30 years ago ownership system was incorporated into the study of FB (Davis & Tagiuri, 1982), but in the area it has been virtually ignored by scholars (Sharma, 2004). Just some authors (Aronoff & Ward, 2002; Betancourt, Gomez, & Lopez, 2011; Gomez, 2010; Jaffe & Lane, 2004) have highlighted the importance of knowing more about the ownership, its governance frameworks and strategies. Countries around the world have been inspired by the Anglo- American and the Continental European corporate governance models in order to minimize agency problems (Aguilera & Jackson, 2003), but in general is difficult the implementation of corporate governance practices in FB because the benefits are unclear. Methodology This study uses the Popperian epistemological method, a quantitative approach with nonparametric statistical test and explanatory scope. The study analyzes a nonrandom sample of 141 public companies listed on the National Registry of Securities and Issuers of Colombia (acronym in Spanish, RNVE) for 2012 period. To identify the relationship between variables a multiple linear regression is used with complete data of the Country Code 1 . The sample was classified in FB 1 The corporate governance code for issuers in Colombia (Country Code) and its 41 practices are available at: https://www.superfinanciera.gov.co/SFCant/Codigop ais/textos/codigopias.pdf. The country code survey is available at: https://www.superfinanciera.gov.co/SFCant/Codigop ais/anexo1.html 4 when three families or less have 50% of shareholder control (45% or 63 companies), if the firm does not meet this criterion was classified as non-FB (55%). The study used parametric statistical testing, it was applied a linear regression model to the nonrandom sample, assuming that the variable had a normal distribution. It works under the assumption that the sample is random, clarifying that strictly speaking is not random because the majority of the companies answer voluntarily the Country Code survey, for this reason the error could be small. Something that can significantly affect the results is that the answers are not sincere and respondents conveniently answer to the state control agency. Research Model This explanatory study aims to explain the influence of ownership governance practices on the FB´ performance. According to Jensen and Meckling, (1976) Agency Theory is useful to analyze this causeeffect relationship because in agency relationship, the agent is hired by the principal to work on its behalf, with autonomous management and in order to maximize profits, which are not always aligned. On the other hand, there are characteristics inherent to the FB nature that were explained through Stewardship Theory, for example topics related with non-financial goals (Westhead & Howorth, 2006), deep emotional investment in the family (Bubolz, 2001), shareholder’ personal satisfaction (motivation) and reputation (Ward, 2004). It is relevant to study FB due to its predominance in the economies of every nation (Holderness, 2009) and its contribution to the generation of employment and generation of wealth production of countries (Shanker & Astrachan, 1996). The combination of Agency and Stewardship Theory allows arguing that the Principal does not seek the maximum economic yield, the main objective is to minimize the risk of the firm. In this sense Agents which aligns their goals with the Principals will result in lower profitability compared with non-FB. The formula proposed to develop this research is: Y=F(X1+X2). Where Y was equal to financial performance, which was analyzed in terms of variance of ROA (Y1), X1 that was equal to the Index of Ownership Governance Practices (IOGP), and X2 that was a dummy variable about the business control which was considered as a FB if three or less families had more than 50% of shares, or otherwise was considered non-FB. The variables used in the study are described below. Business control: Gomez-Betancourt, Lopez, Betancourt and Millan (2012) found that there are
three groups with performance´ differences: (a) firms with majority family ownership structures (family shareholding above 50%), (b) firms with minority family ownership structures (family shareholding between 10% and 50%), and (c) non-FB. This study analyzes businesses with family shareholding above 50%. Some authors (Smyrnios, Sabine, & Astrachan, 2005) have highlighted that families can exert control and power over the decisions of the company. In this research businesses were classified as FB when three or fewer families have more than 50% of shares. Performance: In FB is studied mainly with ROA (Anderson & Reeb, 2003; Gonzalez et al., 2012; Klapper & Love, 2004). In this study the same parameter was followed. IOGP: To measure ownership governance practices were used independent measurements for each practice and as a control mechanism was applied an index inspired in the Corporate Governance Country Code Index (IGCCP in spanish) designed by Lagos and Vecino (2014) from 41 practices of voluntary adoption defined in the Country Code, which evaluates with 80 questions on the principle "comply or explain". An assumption of the study was that survey was validated by the controlling entity because it has been applied since 2008. The IGCCP not used weighting to assess compliance of each practice, only apply one (1) when comply or zero (0) otherwise. Each survey question is linked to some practice of the Country Code, when several questions refer to the same extent, the measurement value is distributed in equal percentages, according to the number of questions that assessed. In this research were selected the practices inherent to ownership and then it was designed the index of ownership governance practices (IOGP). According to Strätling (2003), the functions that shareholders should play are mainly keep informed on the financial performance of the company, be aware of important management decisions, exercise control over the Board of Directors and executive management, discuss past performance and build policies. Based on these guidelines were selected seven measures established in the Country Code that cover the corporate governance practices for owners. The measures were M1 (citation), M2 (Board selection and financial information), M4 (Assembly Agenda), M27 (shareholders attention), M29 (audit), M34 (Conflict resolution) and M38 (fiscal auditor). The IOGP is calculated from zero to seven, with seven as the highest score in governance practices of ownership. The null hypothesis is: there is no relationship between the IOGP in FB and profitability (Yo1 = ROA). The alternative hypothesis is: the higher IOGP in FB, lower profitability viewed as ROA (Y1). Results According to the results obtained the null hypothesis is rejected. The regression model for ROA shows significant results (P
Page 3: PAN-PACIFIC CONFERENCE XXXIV Design
Page 6 and 7: 2017 PAN-PACIFIC PROGRAM COMMITTEE
Page 8 and 9: The Pan-Pacific Business Associatio
Page 10 and 11: TUESDAY, MAY 30, 2017 13:30 - 15:00
Page 12 and 13: WEDNESDAY, MAY 31, 2017 13:30 - 15:
Page 14 and 15: The Adverse Effect of Psychological
Page 16 and 17: Sake Branding Strategy: Securing Ne
Page 18 and 19: The Failure of Transport Megaprojec
Page 20 and 21: WP12 International Finance Alpamayo
Page 22 and 23: INDEX Anderson, John WA12 Iluz, Mic
Page 24 and 25: xx
Page 27 and 28: Women Entrepreneurs and Family Firm
Page 29: catering for the local market. In o
Page 33 and 34: Cross-Disciplinary Education: Not B
Page 35 and 36: Attitudes Towards Servant Leadershi
Page 37 and 38: [6] Liden, R.C., Wayne, S.J., Zhao,
Page 39 and 40: (SD = 7.77), and work experience 12
Page 41 and 42: A representative emotion inventory
Page 43 and 44: emergence of a paradigm. In I. J. G
Page 45 and 46: OBJECTIVE The primary objective of
Page 47 and 48: Threshold effects of psychological
Page 49 and 50: eported in Table 4. Partial F-tests
Page 51 and 52: The adverse effect of psychological
Page 53 and 54: pp. 283-289, 2011. [6] T. Vantilbor
Page 55 and 56: the scales are reported in brackets
Page 57 and 58: The Key Characteristics of Necessit
Page 59 and 60: At a glance, there appears to be so
Page 61 and 62: Job Calling, Work Identity and Job
Page 63 and 64: jobs to achieve set milestones that
Page 65 and 66: competency model is well founded on
Page 67 and 68: I-deal, I-craft, I-perform: A theor
Page 69 and 70: changes that affects their roles (G
Page 71 and 72: mechanisms.There were three overarc
Page 73 and 74: Table 1. Efficiency Results. DMU DE
Page 75 and 76: Not by Bread Alone: Estimating Futu
Page 77 and 78: squeeze more potatoes for direct hu
Page 79 and 80: well explains glocal with a holisti
Page 81 and 82:
motor-vehicle industry in the Johan
Page 83 and 84:
The Collaboration with Infrastructu
Page 85 and 86:
Table1.Koshino Shu Kura (Jyoetsumyo
Page 87 and 88:
product: its focus is on the needs
Page 89 and 90:
The Rise of Populism in the West an
Page 91 and 92:
It is important to note that althou
Page 93 and 94:
1.3 1.2 1.1 1 0.9 0.8 0.7 0.6 Commu
Page 95 and 96:
0.85 customs, the reduction in time
Page 97 and 98:
Table 1. Confirmatory Factor Analys
Page 99 and 100:
Uncovering the Beauty of the Capita
Page 101 and 102:
the largest number of research stud
Page 103 and 104:
An Exploratory Study regarding Mode
Page 105 and 106:
According to the results of hierarc
Page 107 and 108:
Standard Sake has been circulated b
Page 109 and 110:
Can Ethics Be Used as a Tool of Inf
Page 111 and 112:
85
Page 113 and 114:
Defensive reactions as potential re
Page 115 and 116:
Data gathering methods Data (in thi
Page 117 and 118:
utility by comparing with the exist
Page 119 and 120:
Virginia Tech - most calculations f
Page 121 and 122:
Aggression and bullying attributes
Page 123 and 124:
implications for both the individua
Page 125 and 126:
The Role of Factory Facilities on S
Page 127 and 128:
[44]. The following hypotheses are
Page 129 and 130:
Delhi’s garment sector. In Toward
Page 131 and 132:
A Manager’s personal value system
Page 133 and 134:
commenting that good staff would le
Page 135 and 136:
Law, Ethics and Business -How compa
Page 137 and 138:
But to accept as quote, not reprodu
Page 139 and 140:
integrity. In identifying the posit
Page 141 and 142:
Consumer Awareness of Supply Chain
Page 143 and 144:
Applications of Supplier Governance
Page 145 and 146:
oth relational governance mechanism
Page 147 and 148:
changing environment will disrupt g
Page 149 and 150:
The Seven Efforts of Toyooka City:
Page 151 and 152:
Study Related to Factors causing Fo
Page 153 and 154:
- More people tend to choose privat
Page 155 and 156:
students wishing to go to Italy. Ho
Page 157 and 158:
investigating a multitude of design
Page 159 and 160:
The failure of transport megaprojec
Page 161 and 162:
C. Gautrain Gautrain is a high spee
Page 163 and 164:
Delivering the required supply chai
Page 165 and 166:
TABLE 1: Ranking of sills requireme
Page 167 and 168:
[16] Taylor, M. B., 2016. A strateg
Page 169 and 170:
divested fifty-nine percent of its
Page 171 and 172:
Information Technology Project Fail
Page 173 and 174:
Factors of IT project failure One o
Page 175 and 176:
TFIDF w, a = TF w, a * IDF w (1) ID
Page 177 and 178:
A Big Data Processing of Anxiety an
Page 179 and 180:
Anxiety Index is defined as the rat
Page 181 and 182:
serious problems due to pet fires,
Page 183 and 184:
Deployment of Japanese Companies to
Page 185 and 186:
stable politics and society situati
Page 187 and 188:
APEC 61 437 615 21 634 2.8 World 11
Page 189 and 190:
esults in higher levels of adaptati
Page 191 and 192:
Web 2.0 tools for Virtual Reference
Page 193 and 194:
Yes % 12.5% 14.8% 31.5% 33.2% 60.5%
Page 195 and 196:
(Brundage, 2015), reminding one of
Page 197 and 198:
CONCLUSION The review fostered a br
Page 199 and 200:
significant causes of information o
Page 201 and 202:
Circulation Type Farm Waste Managem
Page 203 and 204:
IV. FUTURE CHALLENGES AND ANTIMICRO
Page 205 and 206:
webpages, the Scopus database, Webo
Page 207 and 208:
Supply Chain Materials Flow and the
Page 209 and 210:
more speed, greatly exceeding the p
Page 211 and 212:
To identify the external and intern
Page 213 and 214:
Equality platforms. Also equity ref
Page 215 and 216:
The Strategic Process in Large Ecua
Page 217 and 218:
CONCLUSION AND DISCUSSION The resul
Page 219 and 220:
12/10 12/11 12/12 13/01 13/02 13/03
Page 221 and 222:
Business and Social Initiatives in
Page 223 and 224:
case No. SKS-069. Boston: Harvard B
Page 225 and 226:
Purchase intention Purchase intenti
Page 227 and 228:
Signing the Annual Report of the Sw
Page 229 and 230:
waste. A person without any powers
Page 231 and 232:
2. DEVELOPMENT OF HYPOTHESIS Existi
Page 233 and 234:
Perceptions of financial institutio
Page 235 and 236:
Table1: Perceptions in business eti
Page 237 and 238:
Roles of Regional Absorptive Capaci
Page 239 and 240:
theoretically and intuitively sound
Page 241 and 242:
still intriguing, (Carrington, 2013
Page 243 and 244:
The effectiveness of strategic mana
Page 245 and 246:
improved planning and a reduction i
Page 247 and 248:
elatively stable collection of soci
Page 249 and 250:
Measuring human capital disclosure
Page 251 and 252:
DISCUSSION Managerial implications
Page 253 and 254:
emain in the organization as they m
Page 255 and 256:
Mega transport and logistics infras
Page 257 and 258:
B.‘The Boston Big Dig’ - U.S.A.
Page 259 and 260:
1 if St k ( k 1,2) Skt 0 otherwi
Page 261 and 262:
India’s Technology Initiatives: I
Page 263 and 264:
engine, sanitation, health and work
Page 265 and 266:
Enterprise Finance, Agency), Develo
Page 267 and 268:
Saharan African countries [8]. It i
Page 269 and 270:
Systemic exclusion - barrier to eff
Page 271 and 272:
ecause they focus on managing the r
Page 273 and 274:
II. LITERATURE REVIEW The role of l
Page 275 and 276:
60 50 40 30 20 10 0 Graph 3: Locati
Page 277 and 278:
[25] Blok, M.M., Groenesteijn, L.,
Page 279 and 280:
conducted in ways that diminishes t
Page 281 and 282:
the supply chain. Second, suppliers
Page 283 and 284:
In addition, firms’ responses to
Page 285 and 286:
Limitations of the Theory of Planne
Page 287:
[6] Barney, J. Firm resources and s
show all

Pan-Pacific Conference XXXIV. Designing New Business Models in Developing Economies

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?