Department of Strategy & Policy

A short report from Khoo Hwee Sing on her research findings presented in the conference.

The title of the paper I presented in the Academy of Management is “Does more expropriation mean more gain? An agency theory perspective on family business group in the emerging economy”. We examine the role of concentrated ownership in family business group (FBG) in emerging economy and test how the concentrated ownership structures affect FBG affiliate performance in Taiwan, where such structures have been central to the functioning of FBGs. We propose that the divergence between family ownership and family control serves as an incentive for the controlling family to expropriate minority shareholder’s interest, yet it does not necessarily maximize the controlling family’s return on investment. Results of a longitudinal study over 9 years show that the divergence between family ownership and family control, negatively moderated by age, positively correlates with the amount of R&D investment. In contrast, the divergence has an inverted-U relation with the affiliate’s innovation performance. We also found that different market performance of FBG affiliates moderates controlling family’s decision on R&D investment differently: affiliate with superior performance will have less R&D investment, yet those with inferior performance will have more.

This was my first time to attend AOM and I had a wonderful experience in Anaheim. During the 5-day conference, I had an opportunity to present my own study, and more importantly, to meet scholars from all over the world. During the presentation of our study on Taiwan family business group, I met some scholars from Taiwan and Hong Kong who had conducted similar research on family group ownership structure and performance. Through the engaging discussions, we exchanged ideas on some interesting phenomenon as well as the difficulties we encountered in our research, such as theory application and data collection.

Besides, since my research interest lies in entrepreneurship and SME in the emerging economy, I attended quite a few relevant workshops and paper presentation sessions, such as “New insights into theories of entrepreneurship through new questions to ask” and “Contextualization, integration and potential contributions of China management research”. Ann Tsui, Gerry George, Ranjay Gulati, Wesley Sine and other professors shared with us their insights of this research stream, thus enable me to have a better understanding of the frontier of the current research as well as the future research directions.