Attitudes of Family Firms Towards Outside Investors: The Importance of Organizational Identification

Jeroen Neckebrouck, Sophie Manigart and Miguel Meuleman, 2017. Attitudes of Family Firms towards Outside Investors: The Importance of Organizational Identification. Venture Capital: An International Journal, 19(1-2):29-51. dx.doi.org/10.1080/13691066.2016.1255414

Posted: 25 Feb 2017 Last revised: 15 Sep 2017

See all articles by Jeroen Neckebrouck

Jeroen Neckebrouck

Vlerick Business School; Ghent University - Department of Accountancy and Corporate Finance

Sophie Manigart

Vlerick Business School; Ghent University

Miguel Meuleman

Vlerick Business School; University of Nottingham

Date Written: October 18, 2016

Abstract

More and more family firms open their capital for outside investors, yet existing studies mainly conclude that family firms are more reluctant than nonfamily firms to hand over control to outside investors. In this study, we build on an organizational identification perspective to explore why family firms differ in their attitudes towards outside investors. We hypothesize that family members who identify strongly with their firms are less willing to cede control to outside investors and, if they do cede control, have a stronger preference for investors who may readily identify with family firms, such as family offices or high net worth individuals, rather than investors who may not fit well with a familial identity, such as private equity sponsors or financial investors. We also hypothesize that social identification mediates the relationship between important family firm governance characteristics and preferences for outside investor. Exploratory evidence from a sample of Belgian family firms is supportive of most of our predictions.

Keywords: family firms, outside investors, equity, organizational identification, governance, succession

Suggested Citation

Neckebrouck, Jeroen and Manigart, Sophie and Meuleman, Miguel, Attitudes of Family Firms Towards Outside Investors: The Importance of Organizational Identification (October 18, 2016). Jeroen Neckebrouck, Sophie Manigart and Miguel Meuleman, 2017. Attitudes of Family Firms towards Outside Investors: The Importance of Organizational Identification. Venture Capital: An International Journal, 19(1-2):29-51. dx.doi.org/10.1080/13691066.2016.1255414. Available at SSRN: https://ssrn.com/abstract=2854017

Jeroen Neckebrouck (Contact Author)

Vlerick Business School ( email )

Library
REEP 1
Gent, BE-9000
Belgium

Ghent University - Department of Accountancy and Corporate Finance ( email )

Bedrijfsfinanciering (RUG)
Kuiperskaai 55 E
Ghent, B-9000
Belgium

Sophie Manigart

Vlerick Business School ( email )

Reep 1
Ghent, BE-9000
Belgium

Ghent University ( email )

Sint-Pietersplein 7
Gent, 9000
Belgium

Miguel Meuleman

Vlerick Business School ( email )

Reep 1
Gent, 9000
Belgium
0032(0)92109770 (Phone)
0032(0)92109790 (Fax)

University of Nottingham

University Park
Nottingham, NG8 1BB
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
258
PlumX Metrics