Sustainability Practices in Australian Firms: The Effect of Family Control and the Generational Stage

Carlos Fernández-Méndez and Rubén Arrondo-García
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Carlos Fernández-Méndez: Business Administration, University of Oviedo, 33071 Oviedo, Spain
Rubén Arrondo-García: Business Administration, University of Oviedo, 33071 Oviedo, Spain

Sustainability, 2021, vol. 13, issue 3, 1-16

Abstract: This paper examines the effects of family control on a firm’s adoption of sustainability practices, with special attention given to the heterogeneity of the family business derived from the generational stage of the company. Using a panel of 166 Australian companies listed between 2011 and 2018, we found that family businesses have lower sustainability scores compared to non-family businesses, according to the predictions of the socioemotional wealth (SEW) approach. For a subsample of family businesses, we found that multi-generational family businesses score better on sustainability than firms managed by the founders (first-generation). The SEW perspective could explain the effects of family control based on the pursuit of non-economic goals and the higher risk-aversion of family businesses. The decline in non-economic goals resulting from the ageing of the company stimulates the adoption of better sustainability practices. The generational stage of a family business could be a moderator of the relationship between family control and the adoption of sustainability practices and is a central element in explaining the disparity in the sustainability policies within family businesses.

Keywords: family control; socioemotional wealth; generational stage; sustainability (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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