On The Governance Arrangements Of Listed Family Firms:The Culture-Dependent Compatibility Of Family And Business Logics

Abstract: Extant research maintains that the governance arrangements of listed family firms are shaped by conflicting institutional pressures from the family and from financial markets´observers. While the family pressures the firm to adopt practices that accomodate the family´s socioemotional priorities, financial markets´stakeholders expect listed firms to operate according to a business logic characterized by efficiency, merit, competition and performance. We posit that this characterization is too simplistic, as it does not take into consideration that logics are affected by values and that values vary across cultures. Weth us propose that incorporating the effect of cultural values on the shaping of business logics would lead to refine and advance our understanding of the determinants of listed family firms´ governance arrangements. We argue and show that in long-term oriented societies an intense involvement of the family in the governance of listed firms should not trigger the negative stakeholders´reactions portrayed by past research.