Environmental Performance Focus in Private Family Firms: The Role of Social Embeddedness

Julie Dekker () and Tim Hasso ()
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Julie Dekker: Research Foundation Flanders (FWO)
Tim Hasso: Leuphana University Lüneburg

Journal of Business Ethics, 2016, vol. 136, issue 2, No 7, 293-309

Abstract: Abstract We investigate if private family firms have a greater environmental performance focus than nonfamily firms, and if this relationship is moderated by the strength of the firms’ social embeddedness. We empirically test these issues using a representative sample of 1452 private Australian small and medium-sized enterprises. Contrary to prevailing assumptions and previous indicative findings in the public firm context, our results show that family firms have a lower environmental performance focus than nonfamily firms. However, in cases where the firm is highly embedded in the social community, we find that family firms have a higher environmental performance focus. We explain our unexpected results by considering the role of financial risk in publicly held family firms. Accordingly, we posit that prior findings in the public firm context may be evidence of families expropriating wealth from nonfamily shareholders rather than altruistic pro-environmental behavior.

Keywords: Family firm; Environmental performance focus; Socioemotional wealth; Social embeddedness (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (38)

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DOI: 10.1007/s10551-014-2516-x

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