Do family firms learn more from other family firms than from non-family firms? Adoption of the board reform

• Main Authors: YOSHIKAWA, Toru, SHIM, Jung Wook
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2015
• Subjects: Family firms; board interlocks; practice diffusion; organizational learning; board reform; Entrepreneurial and Small Business Operations; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/6553; https://ink.library.smu.edu.sg/context/lkcsb_research/article/7552/viewcontent/Do_family_firms_learn_more_from_other_family_firms_than_from_non_family_firms_Aug_5_2015.pdf
• Institution: Singapore Management University

Family firms differ from non-family firms because their owners are often motivated not only by economic incentives but also by non-economic considerations. This study investigates the effects of such non-economic motivation, especially the extent of family involvement and family legacy, on the adoption of a new practice, i.e., board reform that was newly introduced in the Japanese context in the late 1990s. Our empirical results show that while family firms are less likely to implement the board reform than non-family firms, board interlocks with other family firms facilitate the adoption. We also found that such factors as large family ownership and family legacy influence the impact of such board interlocks on family firms’ decision to reform their boards.