Industry and Information Asymmetry: The Case of the Employment of Non-Family Managers in Small and Medium-Sized Family Firms
- UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
- Esra Memili, Associate Professor of Entrepreneurship (Creator)
- Institution
- The University of North Carolina at Greensboro (UNCG )
- Web Site: http://library.uncg.edu/
Abstract: As family firms begin to professionalize, they face an important crossroads in deciding whether to employ non-family managers. To preserve socioemotional wealth and minimize agency costs, family owners may resist employing non-family managers. However, industry sector may play a role that influences the employment of non-family managers. We argue that the family's reluctance will be stronger in industries where information asymmetries make monitoring managers more difficult. For industries where monitoring is easier, the benefits of employing non-family managers may offset the loss in socioemotional wealth and increase in agency costs. Results based on a sample of 965 small and medium-sized retail and manufacturing firms confirm our predictions.
Industry and Information Asymmetry: The Case of the Employment of Non-Family Managers in Small and Medium-Sized Family Firms
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Created on 5/11/2017
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Additional Information
- Publication
- Journal of Small Business Management
- Language: English
- Date: 2016
- Keywords
- family firm, managers, employment