Family involvement and the impact of information and communication technology on performance

TLDR: In this paper, the authors explored the moderated effect of family involvement on the relationship between information and communication technology (ICT) and firm performance, using a large panel of Spanish manufacturing firms.

Abstract: Purpose The purpose of this paper is to explore the moderated effect of family involvement on the relationship between information and communication technology (ICT) and firm performance. Design/methodology/approach According to agency and transaction cost theories, distinctive family business characteristics provide a unique context that favours a more efficient use of ICT. The authors perform a multivariate analysis that includes the moderating effect of family involvement and considers the possible endogeneity of the ICT variable. Findings The results, using a large panel of Spanish manufacturing firms, confirm the importance of family involvement for explaining differences in terms of the impact of this technology in family and non-family businesses. The relationship between ICT and performance is stronger for family firms than for non-family firms. Research implications The paper provides new evidence for the academic literature on ICT impact and family firms. It corroborates the importance of using an organizational perspective to explain differences in the effect of ICT on performance. Practical implications Family firms should understand the opportunities that family involvement offers regarding ICT impact on performance, and exploit this moderating effect to achieve competitive advantages. Originality/value No previous studies deal with the impact of family involvement on ICT-performance analysis. This study fills this gap and increases the understanding of how family business involvement moderates the ICT-performance relationship.