International Expansion of U.S. Manufacturing Family Businesses the Effect of Ownership and Involvement

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Journal 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. 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...
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