Comparison of indian family and non-family firms’ strategic choices related to international expansion and csr disclosure

By: Material type: Computer fileComputer filePublication details: Ahmedabad Indian Institute of Management 2024Description: 161 p. illSubject(s): DDC classification:
  • TH 2025-04
Online resources: Summary: Abstract This dissertation investigates whether family firms differ from non-family firms in key decision-making scenarios such as international expansion and corporate social responsibility (CSR) disclosure. Unlike non-family firms that focus on maximizing shareholder wealth, family firms prioritize socioemotional wealth (SEW), encompassing various non-financial objectives. This fundamental difference in focus leads to distinct strategic decisions between the two types of firms. The study is based on listed Indian (NSE-500) family and non-family firms. Family firms are those in which at least one member from the founder’s family holds an executive or board position, and the founding family maintains at least 20% equity ownership. The first essay of the thesis delves into differing choices of family and non-family firms related to the governance structure (equity vs. non-equity) of international strategic alliances (ISA). ISAs are unique due to the inherent risk of partner opportunism, where, despite joint value creation, tensions regarding value appropriation may lead to failures. This essay argues and empirically shows that family firms, compared to non-family firms, prefer international equity alliances over international non-equity alliances despite the former being riskier. Additionally, this essay explores the moderating role of partners’ industry-relatedness and the focal firms’ prior experience in the partner’s home country on the choice of equity vs. non-equity alliances. The second essay explores how family and non-family firms differ in their preference for host-country regulatory environments in cross-border acquisitions (CBA). This essay empirically shows that family firms, compared to non-family firms, prefer host countries with stronger regulatory environments in CBA. Further, the essay investigates how two informal institutional factors—political affinity between the home and the host country and family business legitimacy in the host country—influence the choice of the host-country regulatory environment. The third essay examines disparities in CSR disclosure between family and non-family firms, particularly within the unique Indian context. This essay sheds light on how these differences manifest by examining the diverging motivations of family and non-family firms driving CSR disclosures and the contingent effect of CSR committee independence and women’s representation on corporate boards. This dissertation mainly contributes to the family firms’ internationalization literature and corporate governance literature.
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Thesis (FPM) Vikram Sarabhai Library Non-fiction Thesis TH 2025-04 (Browse shelf(Opens below)) Not for Issue (Restricted Access) CD002752

Thesis Advisory Committee

Prof. Chitra Singla
Prof. Mayank Varshney
Prof. Mohammad Fuad

Abstract

This dissertation investigates whether family firms differ from non-family firms in key decision-making scenarios such as international expansion and corporate social responsibility (CSR) disclosure. Unlike non-family firms that focus on maximizing shareholder wealth, family firms prioritize socioemotional wealth (SEW), encompassing various non-financial objectives. This fundamental difference in focus leads to distinct strategic decisions between the two types of firms. The study is based on listed Indian (NSE-500) family and non-family firms. Family firms are those in which at least one member from the founder’s family holds an executive or board position, and the founding family maintains at least 20% equity ownership.

The first essay of the thesis delves into differing choices of family and non-family firms related to the governance structure (equity vs. non-equity) of international strategic alliances (ISA). ISAs are unique due to the inherent risk of partner opportunism, where, despite joint value creation, tensions regarding value appropriation may lead to failures. This essay argues and empirically shows that family firms, compared to non-family firms, prefer international equity alliances over international non-equity alliances despite the former being riskier. Additionally, this essay explores the moderating role of partners’ industry-relatedness and the focal firms’ prior experience in the partner’s home country on the choice of equity vs. non-equity alliances.

The second essay explores how family and non-family firms differ in their preference for host-country regulatory environments in cross-border acquisitions (CBA). This essay empirically shows that family firms, compared to non-family firms, prefer host countries with stronger regulatory environments in CBA. Further, the essay investigates how two informal institutional factors—political affinity between the home and the host country and family business legitimacy in the host country—influence the choice of the host-country regulatory environment.

The third essay examines disparities in CSR disclosure between family and non-family firms, particularly within the unique Indian context. This essay sheds light on how these differences manifest by examining the diverging motivations of family and non-family firms driving CSR disclosures and the contingent effect of CSR committee independence and women’s representation on corporate boards.

This dissertation mainly contributes to the family firms’ internationalization literature and corporate governance literature.


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