Linking Bonding and Bridging Ownership Social Capital in Private Firms

Written on 20 March 2015.


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Linking Bonding and Bridging Ownership Social Capital in Private Firms.

Despite the dominance of family firms, most academic research is not targeted to them and they remain largely unknown in the literature. Research regarding the specificities of management and governance practices of family firms is especially scarce. The EDHEC Family Business Center undertakes research on management quality within family firms, developing issues such as governance, management, succession, finance and family business role in society.
Linking Bonding and Bridging Ownership Social Capital in Private Firms: Moderating Effects of Ownership-Management Overlap and Family Firm Identity
Uhlaner L. from EDHEC Business School with Matser I., Berent-Braun M. and Flören R. from Nyenrode Business Universiteit, Breukelen, Netherlands (2015)Abstract
In privately-held firms, members of the business-owning group vary in the degree to which they actively assist the firm by mobilizing their networks on the firm’s behalf. Tested on a sample of 679 Dutch privately-held firms, we find such mobilization efforts (referred to as bridging ownership social capital) are more likely with greater bonding ownership social capital—that is, when business-owning group members share the same vision with respect to the firm’s objectives, and when owning group members have higher quality relationships with one another (i.e., more trust, cooperation, honesty, and team spirit). The importance of family firm identity with respect to network mobilization is not simply stated. We do find a small statistically significant relationship between family firm identity and quality of relationships, but with neither shared vision nor network mobilization. Nevertheless, we do find an important interaction of family firm identity and shared vision such that both the positive and negative effects of shared vision are magnified in family firms. Nevertheless, shared vision and quality of relationships are also found to enhance network mobilization in nonfamily firms, especially those where ownership and management overlap.
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