International Diversification and Performance in Family Firm: Exploring Nonlinear Relationships with the Governance Structure in an Emerging Economy

Forthcoming in REFC – Spanish Journal of Finance and Accounting

30 Pages Posted: 18 Mar 2021

See all articles by Christian Espinosa Méndez

Christian Espinosa Méndez

University of Santiago, Chile

Mauricio Jara-Bertin

University of Chile - Business School

Date Written: February 2, 2021

Abstract

In this study we researched the relationship between international diversification and performance in family firms in an emerging economy. Likewise, from the perspective of the governance structure, we investigated non-linear relationships between business group membership, concentration of ownership as well as pyramid ownership with the performance of internationally diversified family firms.

Considering a sample of 83 companies that have been listed on the Santiago de Chile Stock Exchange during the period between 2003 and 2013, we find an inverted U relationship between international diversification and performance; a U relationship between international diversification and performance in family firms; an inverted U relationship between the performance of internationalized family firms and affiliation to a business group; a U relationship between the performance of internationalized family firms and concentration of ownership; and a non-linear relationship in the inverted U form between the performance of internationalized family firms and high divergence between control and cash flow rights and U in the case of low divergence.

Keywords: Family Ownership, International Diversification, Firm Performance, Emerging Economy

JEL Classification: G30, F00

Suggested Citation

Espinosa Méndez, Christian and Jara-Bertin, Mauricio Alejandro, International Diversification and Performance in Family Firm: Exploring Nonlinear Relationships with the Governance Structure in an Emerging Economy (February 2, 2021). Forthcoming in REFC – Spanish Journal of Finance and Accounting, Available at SSRN: https://ssrn.com/abstract=3778311

Christian Espinosa Méndez (Contact Author)

University of Santiago, Chile ( email )

Santiago
Chile

Mauricio Alejandro Jara-Bertin

University of Chile - Business School ( email )

Diagonal Paraguay 257
Santiago, Chile
Chile

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