Article Shaker A Zahra. International expansion of U. S. manufacturing family businesses: the effect of ownership and involvement, Journal of Business Venturing, Volume 18, Issue 4, July 2003, Pages 495–512 Introduction In this article, the researcher analysis the individual and interactive effects of family ownership, the researcher also talk about internationalization of a firm’s operations. They analyses 409 U. S. manufacturing firms and attempt to show the interaction of family ownership and the firm with family involvement are significantly and positively associated with internationalization. Hypotheses
Hypothesis 1 The percentage share of family ownership in the business will be positively related to its level of internationalization. Hypothesis 2 The degree of family involvement in the business will be positively related to its level of internationalization. Hypothesis 3 The interaction of family ownership and involvement will be significantly and positively associated with the firm’s internationalization. Regression Analysis There are two measures of internationalization that the researcher used. That is percent of sales in foreign markets and the number of countries in which the fiem sells its product.
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There are two independent variables that include family ownership and family involvement. Regression analysis is controlled by firm age, size, family, nonfamily, industry type, years the CEO has been in power, past performance and nonfinancial motivations to internationalize. The researcher use t Test to show the relationship between two variables, the t Test shows that family firms lagged behind nonfamily firms in their international sales levels and the number of foreign countries entered, both of their P-value are less than 0. 5.
So the researcher concluded that regression analyses provided support for Hypothesis 1 and Hypothesis 3, and the analyses also supported Hypothesis 2about the effect of family involvement, although the results were not as significant as they were for the other two hypotheses. We have learned how to use p-value to examine whether the Hypothesis need to reject or whether test is significant. We also learned how to use t Test to analysis the relationship between two variables. The results highlight the important role family ownership plays in increasing managers’ willingness to expand internationally.
The findings indicate managers’ interest in protecting their firm’s future. The results of family involvement show a need to ensure that multiple generations of the owner family understand the business. This understanding prepares the owner family to share the risks associated with internationalization while enabling them to contribute in a meaningful way to the firm’s internationalization decisions. The researchers’ conclusions Here are the researchers’ conclusions: 1) The regression results for international sales. The first equation, which included the control variables, was significant (adjusted R2=. 18, P<. 01).
Firm age had a positive and significant coefficient (P<. 05), but being a closely held family firm had a negative but significant coefficient (P<. 05).
In the second equation, the independent variables were added to the study’s controls (adjusted R2=. 27, P<. 001).
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Firm age had a positive and significant coefficient (P<. 05), while being a closely held family business had a negative but significant coefficient (P<. 05).
Family ownership, inside directors’ ownership, CEO duality and family generations in management were positively and significantly associated with international sales (all atP<. 5).
Four involvement measures interacted significantly with family ownership to increase international sales: ownership by inside directors (P<. 01), family members on the board (P<. 05), CEO duality (P<. 05) and the family involvement index (P<. 01).
The interaction of family ownership with generations in management was positive but not significant. 2)When the control variables were considered as predictors of the number of countries entered, the results were significant (adjusted R2=. 19, P<. 001).
While being a closely held family firm had a negative coefficient (P<. 5),
