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

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...

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Main Authors: Carlos Fernández-Méndez, Rubén Arrondo-García
Format: Article
Language:English
Published: MDPI AG 2021-01-01
Series:Sustainability
Subjects:
Online Access:https://www.mdpi.com/2071-1050/13/3/1244
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spelling doaj-8e45926e9a8b464e9c201cd916efe77e2021-01-26T00:06:29ZengMDPI AGSustainability2071-10502021-01-01131244124410.3390/su13031244Sustainability Practices in Australian Firms: The Effect of Family Control and the Generational StageCarlos Fernández-Méndez0Rubén Arrondo-García1Business Administration, University of Oviedo, 33071 Oviedo, SpainBusiness Administration, University of Oviedo, 33071 Oviedo, SpainThis 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.https://www.mdpi.com/2071-1050/13/3/1244family controlsocioemotional wealthgenerational stagesustainability
collection DOAJ
language English
format Article
sources DOAJ
author Carlos Fernández-Méndez
Rubén Arrondo-García
spellingShingle Carlos Fernández-Méndez
Rubén Arrondo-García
Sustainability Practices in Australian Firms: The Effect of Family Control and the Generational Stage
Sustainability
family control
socioemotional wealth
generational stage
sustainability
author_facet Carlos Fernández-Méndez
Rubén Arrondo-García
author_sort Carlos Fernández-Méndez
title Sustainability Practices in Australian Firms: The Effect of Family Control and the Generational Stage
title_short Sustainability Practices in Australian Firms: The Effect of Family Control and the Generational Stage
title_full Sustainability Practices in Australian Firms: The Effect of Family Control and the Generational Stage
title_fullStr Sustainability Practices in Australian Firms: The Effect of Family Control and the Generational Stage
title_full_unstemmed Sustainability Practices in Australian Firms: The Effect of Family Control and the Generational Stage
title_sort sustainability practices in australian firms: the effect of family control and the generational stage
publisher MDPI AG
series Sustainability
issn 2071-1050
publishDate 2021-01-01
description 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.
topic family control
socioemotional wealth
generational stage
sustainability
url https://www.mdpi.com/2071-1050/13/3/1244
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