Heterogeneity in Digital Posture of Family Firms in Emerging Economies
By ABHISHEK KATHURIA, Abhishek Sachdeva, Prasanna Karhade, Sougata Ray
Citation
KATHURIA, ABHISHEK., Sachdeva, Abhishek., Karhade, Prasanna., Ray, Sougata. (2024). Heterogeneity in Digital Posture of Family Firms in Emerging Economies .
Copyright
2024
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Abstract
Family firms, the predominant form of business in emerging economies, differ in their business strategies, behaviors, and outcomes from non-family firms. We conceptualize Digital Posturing as a set of signals firms produce to convey their focus on digital technologies. We propose three hypotheses extending the baseline hypothesis that family firms differ from non-family firms in their Digital Posture. First, Family Business Group (FBG) affiliation negatively influences digital posturing, as FBGs may serve as market-supporting institutions providing financial capital to member firms. Second, there is a negative influence of Foreign Ownership on Digital Posture, which is intensified in the presence of FBG affiliation, as foreign promoters offer financial capital, reducing the need for extensive Digital Posturing to attract external funds. Third, there is a positive influence of the Strength of Family Ties on Digital Posture, which weakens due to FBG affiliation, as external stakeholders perceive such firms as more conservative, and these firms suffer from greater opacity. Empirical analysis, using panel regression on archival data from listed family firms in India (2016-2021), supports our theory, emphasizing how FBG affiliation shapes the strategic IT behavior of firms. This study contributes to the growing literature on family firms within the information systems field