Public family firms and economic inequality across societies

in Journal of Business Venturing Insights (2023), e00376

Research and public interest on economic inequality have grown over the last years. Family firms and the concentration of wealth and power in the hands of a few wealthy entrepreneurial families have been ... [more ▼]

Research and public interest on economic inequality have grown over the last years. Family firms and the concentration of wealth and power in the hands of a few wealthy entrepreneurial families have been discussed as both a cause and a consequence of economic inequality. Yet, so far, we lack knowledge about the relationship between economic inequality and the prevalence of family firms in an economy. Our study investigates how the share of family-controlled public firms correlates with various measures of income and wealth inequality. The results show that a higher share of public family-controlled firms leads to more income inequality in a country. This effect is particularly pronounced for the middle of the income distribution as opposed to the top quantiles. Redistribution only mitigates this effect to some extent, as the effect is significant for market income and disposable income. We also find that a higher share of family-controlled firms contributes to an increase in wealth inequality. Our results are of economic relevance as, for instance, a one standard deviation change in the share of family-controlled firms leads to an increase of around 1.3–1.5 percentage points in the Gini coefficients for market income, disposable income, and wealth. [less ▲]

Trademarks and how they relate to the sustainability and economic outcomes of social startups

in Journal of Cleaner Production (2022)

Prior research shows that trademarks positively relate to startups' growth and survival. However, empirical evidence on the impact of intellectual property rights (IPRs), especially trademarks, on the ... [more ▼]

Prior research shows that trademarks positively relate to startups' growth and survival. However, empirical evidence on the impact of intellectual property rights (IPRs), especially trademarks, on the development of social startups' hybrid outcomes is limited. Our study aims to fill this gap by investigating how early trademarking relates to the sustainability and economic outcomes of social startups. Based on a sample of 485 social startups from Germany, we find that social startups that register a trademark within the first three years of their existence have both significantly higher sustainability and economic outcomes. Additionally, we identify that the geographical scope of a trademark relates differently to social startups' outcomes. Our results contribute to the emerging literature on startups’ role to achieve sustainability outcomes and to IPR research that lacks an understanding of the importance of trademarks for sustainable entrepreneurship. We provide several practical implications for social startups, impact investors, and policy-makers. [less ▲]

Which criteria matter when impact investors screen social enterprises?

in Journal of Corporate Finance (2021), 66

Impact investors pursue both financial and social goals and have become an important source of funding for social enterprises. Our study assesses impact investor criteria when screening social enterprises ... [more ▼]

Impact investors pursue both financial and social goals and have become an important source of funding for social enterprises. Our study assesses impact investor criteria when screening social enterprises. Applying an experimental conjoint analysis to a sample of 179 impact investors, we find that the three most important criteria are the authenticity of the founding team, the importance of the societal problem targeted by the venture, and the venture’s financial sustainability. We then compare the importance of these screening criteria across different types of impact investors (i.e., donors, equity investors, and debt investors). We find that donors pay more attention to the importance of the societal problem and less attention to financial sustainability than do equity and debt investors. Additionally, equity investors place a higher value on the largescale implementation of the social project than do debt investors. We contribute to the nascent literature on impact investing by documenting how impact investors make investment decisions and by providing a nuanced view of different investor types active in this novel market. Practical implications exist for both impact investors and social enterprises. [less ▲]

Social finance in Europe: The transition from grants to follow-up financing for social enterprises

in Moritz, Alexandra; Block, Jörn; Golla, Stephan (Eds.) et al Social finance in Europe: The transition from grants to follow-up financing for social enterprises (2020)

A large number of social enterprises (SEs) use grants as early-stage financing to establish their ventures. However, we know little about the requirements for SEs to receive grants and their follow-up ... [more ▼]

A large number of social enterprises (SEs) use grants as early-stage financing to establish their ventures. However, we know little about the requirements for SEs to receive grants and their follow-up financing opportunities. Based on an interview study with 13 European SEs, we show that SEs need to go through a resource-intensive application process to be able to receive a grant. To finally receive a grant, we find that nonfinancial aspects (e.g., involved people’s passion) and financial sustainability are the most important factors for convincing possible grant providers to finance an SE’s venture. Furthermore, based on signaling theory, we demonstrate that obtaining a grant increases the likelihood of finding follow-up investors. We suggest that further quantitative research should test our conceptual model, which is built on four propositions we formulate. [less ▲]

Was ist eine Familienstiftung?

in Block, Jörn; May, Peter; Betzer, André (Eds.) et al Die Familienstiftung: Ein Instrument zur Zukunftssicherung von Familienunternehmen (2020)

In der Datenbank des Bundesverbands Deutscher Stiftungen existieren aktuell 620 Familienstiftungen und einige dieser Stiftungen halten Anteile an großen Unternehmen in Deutschland, wie bspw. Bertelsmann ... [more ▼]

In der Datenbank des Bundesverbands Deutscher Stiftungen existieren aktuell 620 Familienstiftungen und einige dieser Stiftungen halten Anteile an großen Unternehmen in Deutschland, wie bspw. Bertelsmann, Fielmann oder Würth. Familienstiftungen können in zahlreichen Fällen ein geeignetes Instrument für die Unternehmensnachfolge darstellen, sind für viele Unternehmer aufgrund ihrer vielfältigen Erscheinungsformen jedoch eine „Black Box“. In diesem Kapitel werden die wichtigsten Eigenschaften von Familienstiftungen erläutert, die als Grundlage für das Verständnis dieses Buches dienen sollen. Nach einer kurzen definitorischen Abgrenzung von Familienstiftungen bietet das Kapitel einen ersten Einblick in die Errichtung einer Familienstiftung. Innerhalb dieser liegt ein besonderer Fokus auf den drei Wesensmerkmalen: Stiftungszweck, Stiftungsvermögen und Organisation. [less ▲]