Private Equity focused on Family Firms & Small and Medium Sized Companies: Review and Science Mapping Analysis of the Recent Scientific Field

Laura Arteche-Bueno; Camilo Prado-Román; Antonio Fernández-Portillo

doi:10.24310/ejfbejfb.v9i2.5285

Authors

Laura Arteche-Bueno University Rey Juan Carlos. Madrid (Spain) Spain
Camilo Prado-Román University Rey Juan Carlos. Madrid (Spain) Spain https://orcid.org/0000-0002-1540-0643
Antonio Fernández-Portillo University of Extremadura. Cáceres (Spain) Spain https://orcid.org/0000-0002-2891-4993

DOI:

https://doi.org/10.24310/ejfbejfb.v9i2.5285

Keywords:

Private equity, Family firms, Small and medium-sized companies, Science mapping, Bibliometrics

Agencies: NO

Abstract

Private equity is mostly invested in established firms, of which family firms are the dominant form. This article reports the recent evolution of the scientific research on the PE focused on family firms and small and medium-sized enterprises. The purpose is to identify the main themes related to the field between 1992 and 2018 and to identify and analyze the major thematic areas throughout the period. The methodology applied is the science mapping analysis, which shows that: (i) published research on the field is concentrated in two main thematic areas: corporate governance-entrepreneurship and innovation-management, and; (ii) there has been an atomization of the research field during the last six years. Throughout this article, the authors develop a more complete understanding of the PE scientific field focused on family owned SMEs and provide suggestions for those looking for alternatives to traditional bank financing.

Downloads

Download data is not yet available.

Metrics

Metrics Loading ...

Author Biographies

Laura Arteche-Bueno, University Rey Juan Carlos. Madrid (Spain)

Associate Professor of Finance at URJC.

International PhD Candidate at URJC.

Associate Director of M&A at Clearwater International.

Camilo Prado-Román, University Rey Juan Carlos. Madrid (Spain)

Professor Doctor at URJC

Antonio Fernández-Portillo, University of Extremadura. Cáceres (Spain)

Professor Doctor at University of Extremadura.

References

Acharya, V. V., Gottschalg, O. F., Hahn, M. and Kehoe, C. (2013). “Corporate Governance and Value Creation: Evidence from Private Equity”. Review of financial studies, Vol. 26, No. 2, pp. 368-402. doi: 10.1093/rfs/hhs117.

Acs, Z.J., Morck, R., Shaver, J.M., Yeung, B. (1997). “The Internationalization of Small and Medium-sized Enterprises: A Policy Perspective”. Small Business Economics, Vol. 9, No. 1, pp. 7-20.

Aguilera-Caracuel, J., Guerrero-Villegas, J. and García-Sánchez, E. (2017). “Reputation of multinational companies: Corporate social responsibility and internationalization”. European Journal of Management and Business Economics, Vol. 26, No. 3, pp. 329-346. doi: 10.1108/EJMBE-10-2017-019.

Ahlers, O. (2014). Family Firms and Private Equity: A Collection of Essays on Value Creation, Negotiation, and Soft Factors. Vallendar, Germany: Springer Gabler.

Ahlers, O., Hack, A. and Kellermanns, F.W. (2014). "Stepping into the buyers’ shoes": Looking at the value of family firms through the eyes of private equity investors. Journal of Family Business Strategy, Vol. 5, No. 4, pp. 384-396. doi: 10.1016/j.jfbs.2014.04.002.

Ajzen, I. (1991). “The theory of planned behaviour”. Organizational Behaviour and Human Decision Processes, Vol. 50, pp. 179-211.

Anderson, R. C. and Reeb, D. M. (2003). “Founding-Family Ownership and Firm Performance: Evidence from the S&P 500”. Journal of Finance, Vol. 58, No. 3, pp. 1301–1328.

Astrachan, J. H. and Shanker, M. C. (2003). “Family Businesses’ Contribution to the U.S. Economy: A Closer Look”, Family Business Review, Vol. 16, No. 3, pp. 211–219. doi: 10.1177/08944865030160030601.

Barroso-Castro, C., Villegas-Periñan, M.M. and Domínguez, M. (2017). “Board members’ contribution to strategy: The mediating role of board internal processes”. European Research on Management and Business Economics, Vol. 23, No. 2, pp. 82-89. doi: 10.1016/j.iedeen.2017.01.002.

Benavides-Velasco, C.A., Quintana-García, C. and Guzmán-Parra, V.F. (2013). “Trends in family business research”. Small Business Economics, Vol. 40, pp- 41-57.

Bengtsson, P., Nagel, R. and Nguyen, A. (2008). Value Creation in Buyouts: value-enhancement practices of private equity firms with a hands-on approach. Jönköping International Business School.

Benito-Hernández, S., Priede-Bergamini, T. and López-Cózar-Navarro, C. (2014). “Factos determining exportation and internationalization in family businesses: The importance of debt”. South African Journal of Business Management, Vol. 45, No. 1, pp. 13-15.

Berger, A. N. and Udell, G. F. (1998). “The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle”. Journal of banking & finance, Vol. 22, No. 6-8, pp. 613-673. doi: 10.1016/S0378-4266(98)00038-7.

Bhattacharya, U. and Ravikumar, B. (2001). “Capital markets and the evolution of family businesses”. Journal of Business, Vol. 74, pp. 187-219.

Blair, M. and Stout, L.A. (2001). “Director accountability and the mediating role of the corporate board”. Washington University Law Review, Vol. 79, pp. 403-449.

Bloom, N., Genakos, C., Sadun, R. and Van Reenen, J. (2012). “Management Practices Across Firms and Countries”. Academy of Management Perspectives, Vol. 26, No. 1, pp. 12-33. doi: 10.5465/amp.2011.0077.

Bonini, S. (2015). “Secondary Buyouts: Operating Performance and Investment Determinants”. Financial Management, Vol. 44, No. 2, pp. 431-470. doi: 10.1111/fima.12086.

Bruton, G. D., Filatochev, I., Chahine, S. and Wright, M. (2010). “Governance, Ownership Structure, and Performance of IPO Firms: The Impact of Different Types of Private Equity Investors and Institutional Environments”. Strategic Management Journal, Vol. 31, No. 5, pp. 491-509. doi: 10.1002/smj.822.

Callon, M., Courtial, J. P., Turner, W. A. and Bauin, S. (1983). “From translations to problematic networks: An introduction to co-word analysis”. Social Science Information, Vol. 22, No. 2, pp. 191–235.

Chrisman, J., Chua, J., Pearson, A. W. and Barnett, T. (2012). “Family involvement, family influence and family-centered non-economic goals in small firms”. Entrepreneurship: Theory and Practice, Vol. 36, No. 2, pp. 267–293.

Chua, J. H., Chrisman, J. J., Steier, L. P. and Rau, S. B. (2012). “Sources of Heterogeneity in Family Firms: An Introduction”. Entrepreneurship: Theory and Practice, Vol. 36, No. 6, pp. 1103–1113.

Cobo, M., Chiclana, F., Collop, A., de Oña, J. and Herrera-Viedma, E. (In Press). “A bibliometric analysis of the intelligent transportation systems research based on science mapping”. IEEE Transactions on Intelligent Transportation Systems. doi:10.1109/TITS.2013.2284756.

Cobo, M., López-Herrera, A., Herrera-Viedma, E. and Herrera, F. (2011a). “An approach for detection, quantifying, and visualizing the evolution of a research field: A practical application to the fuzzy sets theory field”. Journal of Informetrics, Vol. 5, pp. 146–166. doi:10.106/j.joi2010.10.002.

Cobo, M., López-Herrera, A., Herrera-Viedma, E. and Herrera, F. (2011b). “Science mapping software tools: Review, analysis and cooperative study among tools”. Journal of the American Society for Information Science and Technology, Vol. 62, pp. 1382–1402. doi:10.1002/asi.21525.

Cobo, M., López-Herrera, A., Herrera F. and Herrera-Viedma, E. (2012a). “A note on the ITS topic evolution in the period 2000-2009 at T-ITS”. IEEE Transactions on Intelligent Transportation Systems, Vol. 13, pp. 413-420. doi: 10.1109/TITS.2011.2167968.

Cobo, M., López-Herrera, A., Herrera-Viedma, E. and Herrera, F. (2012b). “SciMAT: A new science mapping analysis software tool.” Journal of the American Society for Information Science and Technology, Vol. 63, No 8, pp. 1609–1630. doi:10.1002/asi.22688.

Croce, A. and Marti J. (2016). “Productivity Growth in Private-Equity-Backed Family Firms”. Entrepreneurship Theory and Practice, Vol. 40, No. 3, pp. 657-683. doi: 10.1111/etap.12138.

Cumming, D. (2007). “Government Policy Towards Entrepreneurial Finance: Innovation Investment Funds”. ournal Of Business Venturing, Vol. 22, No. 2, pp. 193-235. doi: 10.1016/j.jbusvent.2005.12.002.

Cumming, D., Cole, R. and Li, D. (2016). “Do banks or VCs spur small firm growth?”. Journal of international financial markets, institutions & money, Vol. 41, pp. 60-72. doi: 10.1016/j.intfin.2015.12.005.

Cumming, D., Grilli, L. and Murtinu, S. (2017). “Governmental and independent venture capital investments in Europe: A firm-level performance analysis”. Journal of corporate finance, Vol. 42, pp. 439-459. doi: 10.1016/j.jcorpfin.2014.10.016.

Cumming, D., Siegel, D. S. and Wright, M. (2007). “Private equity, leveraged buyouts and governance”. Journal of corporate finance, Vol. 13, No. 4, pp. 439-460. doi: 10.1016/j.jcorpfin.2007.04.008.

Dvid, J.H., Schoorman, F.D. and Donaldson, L. (1997). “Toward a stewardship theory of management”. Academy of Management Review, Vol. 22, pp. 20.47.

Dawson, A. (2011). “Private equity investment decisions in family firms: The role of human resources and agency costs”. Journal of business venturing, Vol. 26, No. 2, pp. 189-199. doi: 10.1016/j.jbusvent.2009.05.004.

Degeorge, F., Martin, J., Phalippou, L. (2016). “On secondary buyouts”. Journal of financial economics, Vol. 120, No. 1, pp. 124-145. doi: 10.1016/j.jfineco.2015.08.007.

Dehlen, T., Zellwegere, T., Kammerelander, N. and Halter, F. (2014). “The Role Of Information Asymmetry In The Choice Of Entrepreneurial Exit Routes”. Journal Of Business Venturing, Vol. 29, No. 2, pp. 193-209. doi: 10.1016/j.jbusvent.2012.10.001.

Di Toma, P. and Montanari, S. (2017). “Corporate governance effectiveness along the entrepreneurial process of a family firm: the role of private equity”. Journal of Management & Governance, Vol. 21, No. 4, pp. 1023-1052. doi: 10.1007/s10997-016-9373-1.

Dwyer, B. and Kotey, B. (2015). “Financing SME Growth: The Role of the National Stock Exchange of Australia and Business Advisors”. Australian accounting review, Vol. 25, No. 2, pp. 114-123. doi: 10.1111/auar.12074.

European Central Bank (November of 2017). External sources of financing and needs of SMEs in the euro area. Survey on the Access to Finance of Enterprises in the euro area – April to September 2017. pp. 12-16. Retrieved from http://www.ecb.europa.eu/stats/ecb_surveys/safe/html/index.en.html.

European Commission. Entrepreneurship and Small and medium-sized enterprises (SMEs). European Commission. Retrieved from http://www.ec.europa.eu/growth/smes_en.

Fazekas, B. and Becksky-Nagy, P. (2015). “Private equity market in recovery”. Emerging markets queries in finance and business 2014, Vol. 32, pp. 225-231. doi: 10.1016/S2212-5671(15)01386-6.

Ferrer, M. A., Bertoni, F. and Martí Pellón, J. (2010). Effects of venture capital and private equity on investment-cash flow sensitivity of Spanish firms. Universidad Complutense de Madrid.

George, G., Wiklund, J. and Zahra, S.A. (2005). “Ownership and the internationalization of small firms”. Journal of Management, Vol. 31, pp. 210-233.

Gilligan, J. and Wright, M. (2010). Private equity demystified. 2nd edition. London: ICAEW.

Gómez-Mejía, L.R., Haynes, K.T., Núñez-Nickel, M. Jacobson, K.J. and Moyano-Fuentes, J. (2007). “Socioemotional wealth and business risks in family-controlled firms: Evidence from Spanish olive oil mills”. Administrative Science Quarterly, Vol. 51, pp. 106-137.

Grilli, L. and Murtinu, S. (2015). “New technology-based firms in Europe: market penetration, public venture capital, and timing of investment”. Industrial and corporate change, Vol. 24, No. 5, pp. 1109-1148. doi: 10.1093/icc/dtu025.

Haro de Rosario, A., Caba Pérez, M. C. and Cazorla Papis, L. (2013). Eficiencia en el sector del capital riesgo y private equity: análisis del caso español (Doctoral thesis). Universidad de Almería. Almería.

Harzing, A. and van der Wal, R. (2008). “Google scholar as a new source for citation analysis”. Ethics in Science and Environmental Politics, Vol. 8, pp. 61–73. doi: 10.3354/esep0007.

Herrera-Viedma, E., Martínez, M. A., Cobo, M. and Herrera, M. (2015). “Analyzing the Scientific Evolution of Social Work Using Science Mapping”. Research on Social Work Practice 2015, Vol. 25, No. 2, pp. 257-277.

Hirsch, J. (2005). “An index to quantify an individual’s scientific research output”. Proceedings of the National Academy of Sciences, Vol. 102, pp. 16569–16572.

Holden, G., Rosenberg, G. and Barker, K. (2005a). Bibliometrics in social work. Binghamton, NY: Haworth Press.

Hung, Y. D. and Tsai, M. H. (2017). “Value Creation and Value Transfer of Leveraged Buyouts: A Review of Recent Developments and Challenges for Emerging Markets”. Emerging markets finance and trade, Vol. 53, No. 4, pp. 877-917. doi: 10.1080/1540496X.2016.1193000.

IFERA (2003). “Family Businesses Dominate”. Family Business Review, Vol. 16, No. 4, pp. 235–240.

Jensen, M., Kaplan, S., Ferenbach, C., Feldberg, M., Moon, I., Davis, C. (2006). “Morgan Stanley Roundtable on Private Equity and Its import for Public Companies”. Journal of Applied Corporate Finance, Vol. 18, No. 3, pp. 8-37.

Johan, S. and Zhang, M. J. (2016). “Private equity exits in emerging markets”. Emerging markets review, Vol. 29, pp. 133-153. doi: 10.1016/j.ememar.2016.08.016.

Kaplan, S. N., and Schoar, A. (2005). “Private equity performance: Returns, persistence, and capital flows”. Journal of finance, Vol. 60, No. 4, pp. 1791-1823. doi: 10.1111/j.1540-6261.2005.00780.x.

Kaplan, S. N., Martel, F. and Stroberg, P. (2007). “How Do Legal Differences And Experience Affect Financial Contracts?”. Journal of financial intermediation, Vol. 16, No. 3, pp. 273-311. doi: 10.1016/j.jfi.2007.03.005.

Kaufman, A. and Englander, E. (2005). “A team production model of corporate governance”. Academy of Management Executive, Vol. 19, pp. 9-22.

Kimhi, A. (1997). “Intergenerational succession in small family businesses: Borrowing constraints and optimal timing of succession”. Small Business Economics, Vol. 9, pp. 309-318.

Klein, S. B. (2000). “Family Businesses in Germany: Significance and Structure”. Family Business Review, Vol. 13, No. 3, pp. 157–181.

Koropp, C., Kellermanns, F.W., Grichnik, D. and Stanley, L. (2014). “Financial decision in family firms: An adaptation of the theory of planned behavior”. Family Business Review, Vol. 27, pp. 307-327.

KPMG and European Family Business (Sixth edition, 2017). European Family Business Barometer. Retrieved from http://www.europeanfamilybusinesses.eu.

Lahmann, A. D. F., Stranz, W. and Velamuri, V. K. (2017). “Value creation in SME private equity buy-outs”. Qualitative research in financial markets, Vol. 9, No. 1, pp. 2-33. doi: 10.1108/QRFM-01-2016-0004.

López-Herrera, A. G., Herrera-Viedma, E., Cobo, M. J., Martínez, M. A., Kou, G. and Shi, Y. (2012). “A conceptual snapshot of the first decade (2002-2011) of the international journal of information technology & decision making”. International Journal of Information Technology & Decision Making, Vol. 11, pp. 247–270. doi:10.11142/ S021962220124000020.

Mason, C.M. and Harrison, R.T. (2015). “Business Angel Investment Activity In The Financial Crisis: Uk Evidence And Policy Implications”. Environment And Planning C-government And Policy, Vol. 33, No. 1, pp. 43-60. doi: 10.1068/c12324b.

Mason, C, and Pierrakis, Y. (2013). “Venture Capital, The Regions And Public Policy: The United Kingdom Since The Post-2000 Technology Crash”. Regional Studies, Vol. 47, No. 7, pp. 1156-1171. doi: 10.1080/00343404.2011.588203.

Metrick, A. and Yasuda, A. (2005). “Venture Capital and Other Private Equity: a Survey”. European Financial Management, Vol. 17, No. 4, pp. 619-654.

Michiels, A. and Molly, V. (2017). “Financing decision in family businesses: a review and suggestions for developing the field”. Family Business Review, Vol. 30, No. 4, pp. 369-399. Doi: 10.1177/0894486517736958.

Millson, R. and Ward, M. (2005). “Corporate Governance Criteria as Applied in Private Equity Investments”. South African Journal of Business Management, Vol. 36, No. 1, pp. 78-83.

Moed, H., De Bruin, R. and Van Leeuwen, T. (1995). “New bibliometric tools for the assessment of national research performance: Database description, overview of indicators and first applications”. Scientometrics, Vol. 33, pp. 381–422.

Mohnen, P., Palm, F. C., Van Der Loeff, S. S. and Tiwari, A. (2008). “Financial Constraints And Other Obstacles: Are They A Threat To Innovation Activity?”. Economist-Netherlands, Vol. 156, No. 2, pp. 201-214. doi: 10.1007/s10645-008-9089-y.

Morck, R. and Yeung, B. (2003). “Agency Problems in Large Family Business Groups”. Entrepreneurship: Theory & Practice, Vol. 27, No. 4, pp. 367–382.

Neckebrouck, J., Manigart, S. and Meuleman, M. (2017). “Attitudes of family firms toward outside investors: the importance of organizational identification”. Venture Capital, Vol. 19, No. 1-2, pp. 29-50. doi: 10.1080/13691066.2016.1255414.

Nisar, M. N. (2005). “Investor Influence on portfolio company growth and development strategy”. Journal of Private Equity, Vol. 9, No. 1, 22-35.

Noyons, E., Moed, H. and Van Rann, A. (1999b). “Integrating research performance analysis and science mapping”. Scientometrics, Vol. 46, pp. 591–604.

Paglia, J.K. and Harjoto, M.A. (2014). “The effects of private equity and venture capital on sales and employment growth in small and medium-sized businesses”. Journal of banking & finance, Vol. 47, pp. 177–197. doi: 10.1016/j.jbankfin.2014.06.023.

Palaniappan, G. (2017). “Determinants of corporate financial performance relating to board characteristics of corporate governance in Indian manufacturing industry: An empirical study”. European Journal of Management and Business Economics, Vol. 26, No. 1, pp. 67-85. doi: 10.1108/EJMBE-07-2017-005.

Peters, H. P. and Van Raan, A. F. (1993). “Co-word-based science maps of chemical engineering. Part I: Representations by direct multidimensional scaling”. Research Policy, Vol. 22, pp. 23–45.

Poutziouris, P.Z. (2011). “The financial structure and performance of owner-managed family firms: Evidence from the UK economy”. Universia Business Review, Vol. 32, pp. 70.

Preqin (2010). Q3 2010 private equity data: Private equity has strongest quarter since ?nancial crisis. Preqin. http:// privateequityblogger.com/2010/10/q3-2010-private-equitydata.html

Ramón Llorens, M. C. and Hernández Cánovas, G. (2011). Análisis de la actuación del gestor del capital riesgo en la toma de decisiones de participación financiera. Universidad Politécnica de Cartagena.

Renneboog, L., Simons, T. and Wright, M. (2007). “Why Do Public Firms Go Private in the UK? The Impact of Private Equity Investors, Incentive Realignment and Undervaluation”. Journal of corporate finance, Vol. 13, No. 4, pp. 591-628. doi: 10.1016/j.jcorpfin.2007.04.005.

Robertson, J. (2017). “Emergent new finance: hedge funds and private equity funds in East Asia”. Journal of the Asia Pacific Economy, Vol. 22, No. 4, pp. 626-646. doi: 10.1080/13547860.2017.1349861.

Ruiz Martín, M. (2006). Actividad de las entidades de capital riesgo en España. CNMV.

Sánchez Hernández, M. M., Reverte Maya, C. and Rojo Ramírez, A. A. (2013). La valoración de inversiones por parte de las sociedades de capital riesgo: un estudio empírico aplicado al ámbito europeo. Universidad Politécnica de Cartagena.

Seco Benedicto, M. T., Martí Pellón, J. (2007). La actividad de capital riesgo en el área de Asia-Pacífico: entorno y determinantes. Universidad Complutense de Madrid.

Siegel, D., Wright, M. and Filatotchev, I. (2011). “Private Equity, LBOs, and Corporate Governance: International Evidence”. Corporate Governance: An International Review, Vol. 19, No. 3, pp. 185–194.

Small, H. and Amer, J. (1973): “Co-citation in the scienti?c literature: A new measure of the relationship between two documents”. Soc. Inf. Sci., Vol. 24, No. 4, pp. 265–269.

Steier, L. (2003). “Variants Of Agency Contracts In Family-financed Ventures As A Continuum Of Familial Altruistic And Market Rationalities”. Journal Of Business Venturing, Vol. 18, No. 5, pp. 597-618. doi: 10.1016/S0883-9026(03)00012-0.

Strömberg, P. (2008). “The new demography of private equity”. In Lerner, Josh. & Gurung, A. (eds). The Global Impact of Private Equity Report 2008, Globalization of Alternative Investments, Working Papers Vol. 1, World Economic Forum, pp. 3-26.

Tappeiner, F., Howorth, C., Achleitner, A.K. and Schraml, S. (2012). “Demand for private equity minority investments: A study of large family firms”. Journal of family business strategy, Vol. 3, No. 1, pp. 38-51. doi: 10.1016/j.jfbs.2012.01.001.

Tresierra Tanaka, A. E., Balboa Ramón, M. and Martí Pellón, J. (2011). Capital structure analysis in Spanish venture capital-backed firms at the expansion stage. Universidad Complutense de Madrid.

Tsang, E. W. K. (2002). “Learning from overseas venturing experience: The case of Chinese family businesses”. Journal of Business Venturing, Vol. 17, No. 1, pp. 21–40.

Upton, N. and Petty, W. (2000). “Venture capital investment and US family business”. Venture Capital, Vol. 2, pp. 27-39.

Van Raan, A. F. J. (2005). “Measuring science”. Handbook of Quantitative Science and Technology Research. Dordrecht, The Netherlands. pp. 19–50.

Voordeckers, W., Le Breton-Miller, I. and Miller, D. (2014). “In search of the best of both worlds: Crafting a finance paper for the Family Business Review”. Family Business Review, vol. 27, pp. 281-286.

Wasserman, N. (2003). “Founder-Ceo Succession And The Paradox Of Entrepreneurial Success”. Organization Science, Vol. 14, No. 2, pp. 149-172. doi: 10.1287/orsc.14.2.149.14995.

Winton, A. and Yerramilli, V. (2008). “Entrepreneurial finance: Banks versus venture capital”. Journal of financial economics, Vol. 88, No. 1, pp. 51-79. doi: 10.1016/j.jfineco.2007.05.004.

Wright, M., Amess, K., Weir, C. and Girma, S. (2009a). “Private equity and corporate governance: Retrospect and prospect”. Corporate Governance: An International Review, Vol. 17, No. 3, pp. 253–375. doi: 10.1111/j.1467-8683.2009.00744.x.

Wright, M., Jackson, A. and Frobisher, S. (2010). “Private equity in the UK: Building a new future”. Journal of Applied Corporate Finance, Vol. 22, pp. 86–95.

Wright, M., Thompson, S. and Robbie, K. (1992). “Venture capital and management-led, leveraged buy-outs – a European perspective”. Journal of Business Venturing, Vol. 7, No. 1, pp. 47-71. doi: 10.1016/0883-9026(92)90034-O.

Wu, Z., Chua, J.H. and Chrisman, J.J. (2007). “Effects of family ownership and management on small business equity financing”. Journal of Business Venturing, Vol. 22, pp. 875-985.