Lending Behavior toward Family Firms

192 Pages·2014·2.95 MB·English

by  Thomas Pijanowski (auth.)

Familienunternehmen und KMU

Edited by
A. Hack, Berne
A. Calabrò, Witten/Herdecke
H. Frank, Vienna
F. W. Kellermanns, Tennessee
T. Zellweger, St. Gallen
Both Family Firms and Small and Medium Sized Enterprises (SME) feature a
number of distinct behaviors and characteristics which could provide them with
a competitive advantage in the market but could also lead to certain risks. Th e sci-
entifi c series at hand presents research which provides an empirical and theoretical
contribution to the investigation on these specifi c characteristics and their impact
on business practice. Th e overall aim of this series is to advance the development of
theory in the areas of family fi rm and SME management.
Edited by
Professor Dr. Andreas Hack Professor Dr. Andrea Calabrò
University of Berne University of Witten/Herdecke
Professor Dr. Hermann Frank Professor Franz W. Kellermanns,
Vienna University of Economics and Ph.D.
Business University of Tennessee
Professor Dr. Th omas Zellweger
University of St. Gallen
Thomas Pijanowski
Lending Behavior
toward Family Firms
With a foreword by Prof. Dr. Andreas Hack
Th omas Pijanowski
Witten/Herdecke, Germany
Dissertation Witten/Herdecke University, 2013
ISBN 978-3-658-06682-6 ISBN 978-3-658-06683-3 (eBook)
DOI 10.1007/978-3-658-06683-3
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Dedication V
Dedication
“If I have seen a little further it is by standing on the shoulders of giants.”
(Newton, 1676)

This dissertation is dedicated to my parents, Janosch and Barbara Pijanowski. Thank you for
letting me stand on your shoulders. You are the best parents I can imagine.
Unfortunately, my dad is not able to see this dissertation finished and to celebrate it with us.
He died in 2011. I deeply hope that I was able to bring the same amount of joy, happiness and
inspiration to his life as he did to mine. I will always miss you, Dad.
The remaining space is left blank in memory of my father.
Foreword VII
Foreword
What do you think when you hear the term “family business” or “family firm”? Do you al-
ready have a picture in mind? Most people do. They make generic associations with firms that
they perceive as family firms. In addition, many family firms explicitly use such references to
their family background in their marketing and communication efforts – probably in order to
elicit specific associations made with the term “family firm” and to influence stakeholders’
behavior. But does it work? In recent years, researchers have started to investigate whether
the organizational form of “family firms” has become a positively loaded category itself and
whether the communication of family involvement influences the behavior of stakeholders
such as customers or job seekers. For those two groups, research has shown that the commu-
nication of family involvement does indeed influence the behavior of customers and job seek-
ers.
Another interesting and important group of stakeholders are lenders since financing represents
one of the main challenges for family firms. Sufficient capital is the basic requirement neces-
sary to operate the business, to fund innovation, to drive growth and to successfully hand over
the business to next generations. Difficulties in raising enough funds might jeopardize the
company’s ability to survive. Hence the question: Does the communication of family in-
volvement positively influence the company’s ability to raise financing? This is the key issue
examined by Thomas Pijanowski, who uncovers new facets on how changes in the communi-
cation of family involvement impact the lending behavior of bank loan officers within the
lending process. Building upon sound theoretical approaches (Socioemotional Wealth, Agen-
cy Theory, and Resource-Based View) Thomas Pijanowski formulates a strong theoretical
model on the impact of family firm involvement on bank loan officers’ behavior. In addition,
he manages to overcome most of the empirical weaknesses of other studies on lending behav-
ior toward family firms by applying a powerful method, i.e. conjoint-analysis. He uses a
unique sample of 90 loan officers making the results extremely valuable and enhancing their
credibility.
Results indicate that loan officers are influenced by information on the type and level of fami-
ly involvement within the company of a prospective borrower. The study shows that loan of-
ficers react positively to family-related information. Furthermore, Thomas Pijanowski shows
that loan officers are susceptible to the similarity bias in that they prefer family firms that are
more similar to themselves with respect to their socioemotional wealth orientation, indicating
that different loan officers treat different types of family firms heterogeneously as a result of
behavioral biases.
Thereby, the present study makes an exceptional contribution to research in that it applies
new theoretical concepts to the research question, starts to examine differences in lending
behavior toward varying types of family firms and consequently addressing the issue of het-
erogeneity of family firms and finally employs an experimental approach in order to supple-
ment the currently available studies.
VIII Foreword
In addition, it is a valuable piece of work for practitioners, especially for family firm execu-
tives who are concerned with raising funds and wondering whether to promote the company’s
familiness in this context. Overall, Thomas Pijanowski’s dissertation exceeds common expec-
tations for a doctoral thesis and therefore deserves a broad readership in both academia and
management practice.

Prof. Dr. Andreas Hack
Acknowledgements IX
Acknowledgements
The film director Guy Ritchie once said: “I'm not under too much of an illusion of how smart
or un-smart I am because filmmaking ultimately is about teamwork.” The same applies to me
and this dissertation. Though it is an individual work, I know that it would not have been pos-
sible without the help, support, guidance and efforts of a lot of people. Therefore, I would like
to take the opportunity to explicitly thank all of those people who contributed to it.
First, I would like to express my deepest gratitude to my advisor, Prof. Dr. Andreas Hack, for
his excellent guidance, encouragement and patience. I have been amazingly fortunate to have
an advisor who gave me the freedom to explore on my own and at the same time the guidance
and structure to progress and not lose track along the way. He provided me with an excellent
atmosphere for doing and completing this research project.
I would also like to explicitly thank Prof. Dr. Arist von Schlippe for giving me
the opportunity to conduct a research project in collaboration with the Wittner Insitute for
Family Businesses (WIFU). I was delighted to interact with him as he always managed to
open up my horizon showing me new perspectives on things. I really enjoyed our numerous
conversations.
Next, I would like to thank my parents, Barbara and Janosch Pijanowski, for working so hard
to provide for my education and for their unconditional love, support and encouragement.
This project would have been so much harder without you. Thank you for everything you did
for me.
Furthermore, I am grateful to all of the loan officers who supported this research project by
taking the time and participating in the experiment. When you read this, you probably re-
ceived this dissertation as a little gift for your help.
I would also like to thank Prof. Dr. Elliott Parker, Prof. Dr. Andrea Calabrò, Prof. Dr. Franz
Kellermanns, Dr. Nils Kraicy, Dr. Hannes Hauswald, Vanessa Schlüter, Julia Scheller, Katlin
Zimmer and Sabrina Matenaar who have provided useful comments, feedback, camaraderie
and support along the way. In addition, I would like to thank all of the other doctoral students
at the Wittner Insitute for Family Businesses who conducted their research projects during the
same time. It was always a pleasure to critically discuss ideas with you in our colloquia.
I am also thankful to all of my friends who dragged me away from the laptop and got me to
move and workout. It’s only because of them that my back didn’t hurt all the time from the
endless hours of sitting in front of my computer. Overall, I would like to thank all of my
friends for supporting me during this time.
Finally, I would like to thank Dr. Joann Schoen for putting in so much work and proofreading
the dissertation in such a detail. I really appreciated it and hope to be able to return this favor
in the near future one way or another.
Well, that’s it. I hope that I mentioned every person who contributed to this dissertation one
way or the other. However, if you do not find yourself in the text in the way you were expect-
X Acknowledgements
ing it, I am sorry for that. In this case, feel free to drop by and complain to me about that. I
will welcome you with a drink or two and you can help me to remember the good times.

Thomas Pijanowski