Do board characteristics play a moderating role in M&A decisions of family firms?

Author:

Raithatha MehulORCID,Ladkani RadhaORCID

Abstract

PurposeThe purpose of this paper is to examine the moderating effect of the board of directors on the strategic decisions made by family firms, and to understand the board attributes that can alleviate the aversion of family-owned firms toward mergers and acquisitions (M&A).Design/methodology/approachThe study uses a sample of several firms listed in India from 2006 to 2019 with 19,813 firm-year observations. The empirical tests have been performed using logistic and negative binomial regressions. The study also tests for endogeneity with the help of Heckman (1979) two-step treatment effects model.FindingsThe study shows that board characteristics like smaller board-size, presence of outside directors, lower intensity of board activity, presence of busier board members and separation of board chair and CEO positions alleviate the inhibition of family firms toward M&A.Research limitations/implicationsThe findings imply that investors and policymakers can encourage family firms to have smaller boards, more independent directors, passive boards and CEO nonduality to reduce their aversion toward risky activities. Family-owned firms could consider a board comprising members with multiple directorships who can bring wider knowledge and expertise which can reduce the perceived threat to socioemotional wealth (SEW) and alleviate their aversion toward M&A.Originality/valueOwnership concentration in family firms posits a unique challenge in terms of their aversion toward M&A. This study is one of the few that highlight the relevance of the monitoring and advisory role of the board in alleviating this aversion in an emerging market like India.

Publisher

Emerald

Subject

General Earth and Planetary Sciences,General Environmental Science

Cited by 7 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

同舟云学术

1.学者识别学者识别

2.学术分析学术分析

3.人才评估人才评估

"同舟云学术"是以全球学者为主线,采集、加工和组织学术论文而形成的新型学术文献查询和分析系统,可以对全球学者进行文献检索和人才价值评估。用户可以通过关注某些学科领域的顶尖人物而持续追踪该领域的学科进展和研究前沿。经过近期的数据扩容,当前同舟云学术共收录了国内外主流学术期刊6万余种,收集的期刊论文及会议论文总量共计约1.5亿篇,并以每天添加12000余篇中外论文的速度递增。我们也可以为用户提供个性化、定制化的学者数据。欢迎来电咨询!咨询电话:010-8811{复制后删除}0370

www.globalauthorid.com

TOP

Copyright © 2019-2024 北京同舟云网络信息技术有限公司
京公网安备11010802033243号  京ICP备18003416号-3