Euro adoption and intra-European Union exporters’ productivitydifferences between family and non-family firms

  1. Basco Rodrigo 1
  2. Bassetti Thomas 2
  3. Muñoz-Bullón Fernando 3
  4. Sanchez-Bueno Maria J 3
  1. 1 American University of Sharjah
    info

    American University of Sharjah

    Sarja, Emiratos Árabes Unidos

    ROR https://ror.org/001g2fj96

  2. 2 University of Padua
    info

    University of Padua

    Padua, Italia

    ROR https://ror.org/00240q980

  3. 3 Universidad Carlos III de Madrid
    info

    Universidad Carlos III de Madrid

    Madrid, España

    ROR https://ror.org/03ths8210

Mostrar afiliaciones +
Revista:
European Research on Management and Business Economics

ISSN: 2444-8834

Año de publicación: 2023

Volumen: 29

Número: 3

Páginas: 77-95

Tipo: Artículo

DIALNET GOOGLE SCHOLAR

Otras publicaciones en: European Research on Management and Business Economics

Resumen

How do exporters react to changes in formal institutional contexts? We hypothesise that when the formal institutional context reduces uncertainty, family-firm exporters increase their productivity more than those of non-family firms. To examine our general conjecture empirically, we leveraged the shift from a flexible to a fixed exchange rate regime that occurred with the adoption of the euro. Our findings showed that, after adopting the euro, intra-European Union (EU) family-firm exporters achieved higher productivity than non-family-firm exporters. Owing to the elimination of exchange rate volatility, intra-EU family-firm exporters, who were particularly sensitive to uncertainty because of their specificities related to wealth concentration, family-oriented goals, and corporate transparency, became more willing to adopt investment decisions than intra-EU non-family-firm exporters. Consequently, these investments yielded significant improvements in the productivity levels of the former group. We also found that the gains in productivity were not evenly distributed among intra-EU family-firm exporters. The introduction of the euro facilitated the transition of intra-EU family-firm exporters from low to intermediate productivity levels. Moreover, it allowed those with initially intermediate productivity levels to remain in the same group, while reducing the likelihood of falling behind high-productivity intra-EU family-firm exporters.

Referencias bibliográficas

  • Alayo, M., Maseda, A., Iturralde, T., & Calabr`o, A. (2022). We are family! The role of family members’ identification in the internationalization of family firms. European Management Journal. https://doi.org/10.1016/j.emj.2022.05.006 (in press).
  • Aldy, J. E. (2006). Per capita carbon dioxide emissions: Convergence or divergence? Environmental and Resource Economics, 33(4), 533–555.
  • Alessandri, T. M., Cerrato, D., & Eddleston, K. A. (2018). The mixed gamble of internationalization in family and nonfamily firms: The moderating role of organizational slack. Global Strategy Journal, 8(1), 46–72.
  • Almodóvar, P., Verbeke, A., & Rodríguez-Ruiz, ´ O. (2016). The internationalization of small and medium-sized family enterprises: The role of human asset quality. Journal of Leadership & Organizational Studies, 23(2), 162–174.
  • Amato, S., Basco, R., G´omez-Ans´ on, S., & Lattanzi, N. (2020). Family-managed firms and employment growth during an economic downturn: Does their location matter? Baltic Journal of Management, 15(4), 607–630.
  • Amato, S., Basco, R., & Lattanzi, N. (2022). Contextualizing employment outcomes in family business research: Current findings and future research avenues. Management Review Quarterly, 72, 531–604.
  • Anderson, R. C., Duru, A., & Reeb, D. M. (2009). Founders, heirs, and corporate opacity in the United States. Journal of Financial Economics, 92(2), 205–222.
  • Anderson, R. C., Mansi, S. A., & Reeb, D. M. (2003). Founding family ownership and the agency cost of debt. Journal of Financial Economics, 68(2), 263–285.
  • Anderson, R. C., & Reeb, D. M. (2003). Founding-family ownership and firm performance: Evidence from the S&P 500. The Journal of Finance, 58(3), 1301–1328.
  • Angrist, J. D., & Pischke, J. S. (2008). Hysteresis in import prices: The beachhead effect. Princeton University Press.
  • Arellano, M. (2003). Panel data econometrics. Oxford University Press.
  • Aparicio, G., Basco, R., Iturralde, T., & Maseda, A. (2017). An exploratory study of firm goals in the context of family firms: An institutional logics perspective. Journal of Family Business Strategy, 8(3), 157–169.
  • Arregle, J. L., Hitt, M. A., & Mari, I. (2019). A missing link in family firms’ internationalization research: Family structures. Journal of International Business Studies, 50, 809–825.
  • Arregle, J.-L., Chirico, F., Kano, L., Kundu, S. K., Majocchi, A., & Schulze, W. S. (2021). Family firm internationalization: Past research and an agenda for the future. Journal of International Business Studies, 52(6), 1159–1198.
  • Baldwin, R. (1988). Hysteresis in import prices: The beachhead effect. The American Economic Review, 78(4), 773–785.
  • Baldwin, R., & Krugman, P. (1989). Persistent trade effects of large exchange rate shocks. The Quarterly Journal of Economics, 104(4), 635–654.
  • Ballot, G., Fakhfakh, F., & Taymaz, E. (2001). Firms’ human capital, R&D and performance: A study on French and Swedish firms. Labour Economics, 8(4), 443–462.
  • Baron, D. P. (1971). Demand Uncertainty in Imperfect Competition. International Economic Review, 12(2), 196–208.
  • Basco, R. (2017). Where do you want to take your family firm?” A theoretical and empirical exploratory study of family business goals. Business Research Quarterly, 20 (1), 28–44.
  • Basco, R., & Bartkeviˇ ci¯ ut˙ e, I. (2016). Is there any room for family business into European Union 2020 Strategy? Family business and regional public policy. Local Economy, 31 (6), 709–732.
  • Bassetti, T., Benos, N., & Karagiannis, S. (2013). CO2 emissions and income dynamics: What does the global evidence tell us? Environmental and Resource Economics, 54(1), 101–125.
  • Bernard, A. B., Eaton, J., Jensen, J. B., & Kortum, S. (2003). Plants and productivity in international trade. American Economic Review, 93(4), 1268–1290.
  • Bernard, A. B., & Jensen, J. B. (2004). Why some firms export. Review of Economics and Statistics, 86, 561–569.
  • Berrone, P., Cruz, C., & Gomez-Mejia, L. R. (2012). Socioemotional wealth in family firms: Theoretical dimensions, assessment approaches, and agenda for future research. Family Business Review, 25(3), 258–279.
  • Bertola, G., & Rogerson, R. (1997). Institutions and labor reallocation. European Economic Review, 41(6), 1147–1171.
  • Bianco, M., Bontempi, M., Golinelli, R., & Parigi, G. (2013). Family firms’ investments, uncertainty and opacity. Small Business Economics, 40(4), 1035–1058.
  • Blair, M. M. (1995). Rethinking assumptions behind corporate governance. Challenge, 38 (6), 12–17.
  • Bodea, C. (2010). Exchange rate regimes and independent central banks: A correlated choice of imperfectly credible institutions. International Organization, 64(3), 411–442.
  • Boyle, G. W., & Guthrie, G. A. (2003). Investment, uncertainty, and liquidity. The Journal of Finance, 58(5), 2143–2166.
  • Brouthers, K. (2002). Institutional, cultural and transaction cost influences on entry mode choice and performance. Journal of International Business Studies, 33, 203–221.
  • Byrne, J. P., & Davis, E. P. (2005). Investment and Uncertainty in the G7. Review of World Economics, 141(1), 1–32.
  • Caballero, R. J. (1991). On the sign of the investment-uncertainty relationship. The American Economic Review, 81(1), 279–288.
  • Campos-García, I., Mu˜ noz-Bull´on, F., Sanchez-Bueno, M. J., & Zú˜ niga-Vicente, J. A. (2020). Exploring the exporting-downsizing link: Does the type of export strategy and firm efficiency in foreign markets matter? Journal of Business Research, 108, 324–336.
  • Cappellari, L., Dell’Aringa, C., & Leonardi, M. (2012). Temporary employment, job flowsand productivity: A tale of two reforms. The Economic Journal, 122(562), F188–F215.
  • Casillas, J. C., & Moreno-Menendez, A. M. (2017). International business & family business: Potential dialogue between disciplines. European Journal of Family Business, 7(1–2), 25–40.
  • Castiglionesi, F., & Ornaghi, C. (2013). On the determinants of total factor productivity growth: Evidence from Spanish manufacturing firms. Macroeconomic Dynamics, 17 (3), 501–530
  • Cerrato, D., & Piva, M. (2012). The internationalization of small and medium-sized enterprises: The effect of family management, human capital and foreign ownership. Journal of Management & Governance, 16(4), 617–644.
  • Cirillo, A., Mu˜noz-Bullon, F., S´ anchez-Bueno, M. J., & Sciascia, S. (2022). Employee downsizing and sales internationalization strategy in family firms. Journal of Family Business Strategy, 13(2), Article 100354.
  • Comin, D. (2010). Total factor productivity. In S. N. Durlauf, & L. E. Blume (Eds.), Economic growth. The new Palgrave economics collection. Palgrave Macmillan. https:// doi.org/10.1057/9780230280823_32.
  • Craine, R. (1989). Risky business: The allocation of capital. Journal of Monetary Economics, 23(2), 201–218.
  • Darby, J., Hallett, A. H., Ireland, J., & Piscitelli, L. (1999). The impact of exchange rate uncertainty on the level of investment. The Economic Journal, 109(454), 55–67.
  • Daspit, J. J., Chrisman, J. J., Ashton, T., & Evangelopoulos, N. (2021). Family firm heterogeneity: A definition, common themes, scholarly progress, and directions forward. Family Business Review, 34(3), 296–322.
  • Delgado, M. A., Farinas, J. C., & Ruano, S. (2002). Firm productivity and export markets: A non-parametric approach. Journal of nternational Economics, 57(2), 397–422.
  • Diaz-Moriana, V., Hogan, T., Clinton, E., & Brophy, M. (2019). Defining family business: A closer look at definitional heterogeneity. In E. Memili, & C. Dibrell (Eds.), The Palgrave handbook of heterogeneity among family firms. Palgrave Macmillan. https:// doi.org/10.1007/978-3-319-77676-7_13.
  • Dixit, A, & Pindyck, R. (1994). Investment under uncertainty. Princeton University Press.
  • Dixit, Avinash. (1989a). Entry and exit decisions under uncertainty. Journal of Political Economy, 97(3), 620–638.
  • Dixit, Avinash. (1989b). Hysteresis, import penetration, and exchange rate pass-through. The Quarterly Journal of Economics, 104(2), 205–228.
  • Eudey, G. (1988). Why is Europe forming a monetary union? Business Review, 3–21.
  • Fiaschi, D., & Lavezzi, A. M. (2003). Distribution dynamics and nonlinear growth. Journal of Economic Growth, 8(4), 379–401.
  • Firpo, S., Fortin, N. M., & Lemieux, T. (2009). Unconditional quantile regressions. Econometrica, 77(3), 953–973.
  • Gagliardi, N., Grinza, E., & Rycx, F. (2023). Workers’ tenure and firm productivity: New evidence from matched employer-employee panel data. Industrial Relations: A Journal of Economy and Society, 62(1), 3–33.
  • Giavazzi, F., & Pagano, M. (1988). The advantage of tying one’s hands: EMS discipline and Central Bank credibility. European Economic Review, 32(5), 1055–1075.
  • Girma, S., Greenaway, A., & Kneller, R. (2004). Does exporting increase productivity? A microeconometric analysis of matched firms. Review of International Economics, 12 (5), 855–866.
  • Gomez-Mejia, L. R., Haynes, K. T., Nu˜ nez-Nickel, M., Jacobson, K. J. L., & Moyano- Fuentes, H. (2007). Socioemotional wealth and business risk in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52(1), 106–137.
  • Hamelin, A. (2013). Influence of family ownership on small business growth. Evidence from French SMEs. Small Business Economics, 41(3), 563–579.
  • Harris, R., & Moffat, J. (2015). Plant-level determinants of total factor productivity in Great Britain, 1997–2008. Journal of Productivity Analysis, 44, 1–20.
  • Hiebl, M. R. W. (2012). Risk aversion in family firms: What do we really know? The Journal of Risk Finance, 14(1), 49–70.
  • Hoskisson, R. E., Hitt, M. A., Johnson, R. A., & Grossman, W. (2002). Conflicting voices: The effects of institutional ownership heterogeneity and internal governance on corporate innovation strategies. Academy of Management Journal, 45(4), 697–716.
  • Hsiao, C., Steve Ching, H., & Ki Wan, S. (2012). A panel data approach for program evaluation: Measuring the benefits of political and economic integration of Hong Kong with mainland China. Journal of Applied Econometrics, 27(5), 705–740.
  • Isik, M. (2005). Incorporating decision makers’ risk preferences into real options models. Applied Economics Letters, 12(12), 729–734.
  • Johanson, J., & Vahlne, J. E. (1977). The internationalization process of the firm - a model of knowledge development and increasing foreing market commitment. Journal of International Business Studies, 8(1), 23–32.
  • Johns, G. (2006). The essential impact of context on organizational behavior. Academy of Management Review, 31(2), 386–408.
  • Johnson, S., McMillan, J., & Woodruff, C. (2002). Property rights and finance. American Economic Review, 92(5), 1335–1356.
  • Kano, L., & Verbeke, A. (2018). Family firm internationalization: Heritage assets and the impact of bifurcation bias. Global Strategy Journal, 8(1), 158–183.
  • Keupp, M. M., & Gassmann, O. (2009). The past and the future of international entrepreneurship: A review and suggestions for developing the field. Journal of Management, 35(3), 600–633.
  • Kim, Y. E., & Loayza, N. V. (2019). Productivity growth. Patterns and determinants across the world. Policy Research Working Paper, 8852. Retrieved from https://documents1. worldbank.org/curated/en/130281557504440729/pdf/Productivity-Growth-Patte rns-and-Determinants-across-the-World.pdf
  • Kline, P. (2011). Oaxaca-blinder as a reweighting estimator. The American Economic Review, 101(3), 532–537.
  • Krueger, N., Bogers, L. A. M., Labaki, R., & Basco, R. (2021). Advancing family business science through context theorizing: The case of the Arab world. Journal of Family Business Strategy, 12(1), 10377.
  • Krugman, P. R. (1989). Exchange-rate instability. MIT Press.
  • Leland, H. E. (1972). Theory of the firm facing uncertain demand. The American Economic Review, 62(3), 278–291.
  • Levinsohn, J., & Petrin, A. (2003). Estimating production functions using inputs to control for unobservables. The Review of Economic Studies, 70(2), 317–341.
  • Lyandres, E., & Zhdanov, A. (2010). Accelerated investment effect of risky debt. Journal of Banking & Finance, 34(11), 2587–2599.
  • MacRae, E. C. (1977). Estimation of time-varying markov processes with aggregate data. Econometrica, 45(1), 183–198.
  • Martikainen, M., Nikkinen, J., & V¨ ah¨amaa, S. (2009). Production functions and productivity of family firms: Evidence from the S&P500. The Quarterly Review of Economics and Finance, 49(2), 295–307.
  • Martin, G., & Gomez-Mejia, L. (2016). The relationship between socioemotional and financial wealth. Management Research: Journal of the Iberoamerican Academy of Management, 14(3), 215–233.
  • Mastromarco, C., & Zago, A. (2012). On modeling the determinants of TFP growth. Structural Change and Economic Dynamics, 23(4), 373–382.
  • Matzler, K., Veider, V., Hautz, J., & Stadler, C. (2015). The impact of family ownership, management, and governance on innovation. Journal of Product Innovation Management, 32(3), 319–333.
  • Melitz, M. J. (2003). The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica, 71(6), 1695–1725.
  • Migliori, S., De Massis, A., Maturo, F., & Paolone, F. (2020). How does family management affect innovation investment propensity? The key role of innovation impulses. Journal of Business Research, 113, 243–256. Moll, B. (2014). Productivity Losses from Financial Frictions: Can Self-Financing Undo Capital Misallocation? American Economic Review, 104(10), 3186–3221.
  • Morck, R. K., & Yeung, B. (2003). Agency problems in large family business groups. Entrepreneurship Theory and Practice, 27(4), 367–382.
  • Nadiri, M. I. (1970). Some approaches to the theory and measurement of total factor productivity: A survey. Journal of Economic Literature, 8(4), 1137–1177.
  • North, D. (1990). Institutions, institutional change and economic performance (Political economy of institutions and decisions). Cambridge University Press. https://doi.org/ 10.1017/CBO9780511808678
  • O’Mahony, M., & Vecchi, M. (2009). R&D, knowledge spillovers and company productivity performance. Research Policy, 38(1), 35–44.
  • Onkelinx, J., Manolova, T. S., & Edelman, L. F. (2015). Human capital and SME internationalization: Empirical evidence from Belgium. International Small Business Journal, 34(6), 818–837.
  • Petrin, A., & Levinsohn, J. (2012). Measuring aggregate productivity growth using plant- level data. The RAND Journal of Economics, 43(4), 705–725.
  • Pierce, J. L., Kostova, T., & dirks, K. T. (2001). Toward a theory of psychological ownership in organizations. Academy of Management Review, 26(2), 298–310.
  • Pukall, T. J., & Calabr` o, A. (2014). The internationalization of family firms: A critical review and integrative model. Family Business Review, 27(2), 103–125.
  • Quah, D. (1993). Empirical cross-section dynamics in economic growth. European Economic Review, 37(2), 426–434.
  • Reuber, A. R., & Fischer, E. (1997). The influence of the management team’s international experience on the internationalization behaviors of SMES. Journal of International Business Studies, 28(4), 807–825.
  • Roberts, M. J., & Tybout, J. R. (1997). The decision to export in Colombia: An empirical model of entry with sunk costs. The American Economic Review, 87(4), 545–564.
  • Robins, J. M., Rotnitzky, A., & Zhao, L. P. (1994). Estimation of regression coefficients when some regressors are not always observed. Journal of the American Statistical Association, 89(427), 846–866.
  • Salomon, R., & Shaver, J. M. (2005). Export and domestic sales: Their interrelationship and determinants. Strategic Management Journal, 26(9), 855–871.
  • Sandmo, A. (1971). On the theory of the competitive firm under price uncertainty. The American Economic Review, 61(1), 65–73.
  • Schulze, W. S., Lubatkin, M. H., Dino, R. N., & Buchholtz, A. K. (2001). Agency relationships in family firms: Theory and evidence. Organization Science, 12(2), 99–116.
  • Shleifer, A., & Vishny, R. W. (1997). A survey of corporate governance. The Journal of Finance, 52(2), 737–783.
  • Stulz, R. M. (2005). The limits of financial globalization. Journal of Finance, 60(4), 1595–1638.
  • Teagarden, M. B., Von Glinow, M. A., & Mellahi, K. (2018). Contextualizing international business research: Enhancing rigor and relevance. Journal of World Business, 53(3), 303–306.
  • Tebaldi, E. (2016). The dynamics of total factor productivity and institutions. Journal of Economic Development, 41(4), 1–25.
  • Tomlin, B. (2006). On the value of mitigation and contingency strategies for managing supply chain disruption risks. Management Science, 52(5), 639–657.
  • Troske, K. R., & Voicu, A. (2010). Joint estimation of sequential labor force participation and fertility decisions using Markov chain Monte Carlo techniques. Labour Economics, 17(1), 150–169.
  • Urkiola, E., & Alayo, M. (2022). Internationalization and family firms: The influence of family involvement on exports. European Journal of Family Business, 12(2), 173–183.
  • Wagner, J. (2007). Exports and productivity: A survey of the evidence from firm-level data. World Economy, 30, 60–82.
  • Weintraub, G. Y., Benkard, C. L., & Van Roy, B. (2008). Markov perfect industry dynamics with many firms. Econometrica, 76(6), 1375–1411.
  • Wooldridge, J. M. (2009). On estimating firm-level production functions using proxy variables to control for unobservables. Economics Letters, 104(3), 112–114.
  • Wright, P., Ferris, S. P., Sarin, A., & Awasthi, V. (1996). Impact of corporate insider, blockholder, and institutional equity ownership on firm risk taking. The Academy of Management Journal, 39(2), 441–463.
  • Zeira, J. (1990). Cost uncertainty and the rate of investment. Journal of Economic Dynamics and Control, 14(1), 53–63.
Fuente de los datos: Dialnet