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Variations in R&D Investments of Family and Nonfamily Firms: Behavioral Agency and Myopic Loss Aversion Perspectives

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The behavioral agency model suggests that to preserve socioemotional wealth, loss-averse family firms usually invest less in R&D than nonfamily firms. However, behavioral agency model predictions are inconsistent with the well-accepted premise that family firms have a long-term investment orientation. We reconcile these seemingly incompatible predictions by adding insights from the myopic loss aversion framework, which deals with the impact of decision-making time horizons. The combination of these two prospect theory derivatives led us to hypothesize that family firms usually invest less in R&D than nonfamily firms but the variability of their investments will be greater owing to differences in the compatibility of long- and short-term family goals with the economic goals of a firm. However, when performance is below aspiration levels, we theorize that family goals and economic goals tend to converge. In this situation, the R&D investments of family firms are expected to increase and the variability of those investments decrease, relative to nonfamily firms. Analysis of 964 publicly held family and nonfamily firms from the Standard & Poor's 1500 between 1998 and 2007 support our hypotheses, confirming a need to take the heterogeneity of family firms more fully into account. .Printed Journal

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Ketersediaan

Call Number	Location	Available
AMJ5504	PSB lt.dasar - Pascasarjana	1

Penerbit	Academy of Management.,
Edisi	-
Subjek	Family enterprises Entrepreneurship Behavioral dec
ISBN/ISSN	14273
Klasifikasi	-
Deskripsi Fisik	-
Info Detail Spesifik	-
Other Version/Related	Tidak tersedia versi lain
Lampiran Berkas	Tidak Ada Data