Socioemotional wealth of family firms during the COVID-19 pandemic: the role of slack resources

Abstract

PurposeThis study investigates the behaviour of family firms, family management and family ownership regarding their socioemotional wealth (Corporate Social Responsibility (CSR)) during the COVID-19 pandemic and according to their slack resources availability.Design/methodology/approachThis study employs a multiple regression analysis to analyse 245 firm-year observations from 2020 to 2021.FindingsFamily firms have a negative effect on CSR, as do family management and family ownership. Slack resources (both absorbed and unabsorbed) reduce the negative effect of family firms (and family ownership) on CSR. Unabsorbed slack resources reduce the negative effect of family management on CSR and absorbed slack resources increase the negative effect of family management on CSR. The results are robust with various measurements of slack resources. Extra analyses reveal that family commissioner has no effect on CSR.Originality/valueTo the best of the author’s knowledge, this is the first empirical study to analyse the impact of COVID-19 on the preservation of socioemotional wealth in family firms. This study proves the theoretical argument of prior studies that the preservation of socioemotional wealth in family firms during the COVID-19 pandemic depends on their financial condition. The study also proves that there are different attitudes among family ownership, family management and family firms concerning the use of slack resources for socioemotional wealth preservation that have not been analysed by previous research.