Export Behavior and Board Independence in Colombian Family Firms: The Reverse Causality Relationship

40 Pages Posted: 6 Aug 2016

See all articles by Hernan Herrera-Echeverry

Hernan Herrera-Echeverry

Universidad EAFIT - School of Economics and Finance - Center for Research in Economic & Finance (CIEF)

Jose Geleilate

Florida International University (FIU)

Sandra Constanza Gaitan Riaño

Universidad EAFIT - School of Economics and Finance - Center for Research in Economic & Finance (CIEF)

Haar Jerry

Florida International University (FIU)

Nidia Soto

Superintendencia de Sociedades

Date Written: May 2, 2016

Abstract

In the context of greater market liberalization in Latin America, one issue that merits greater attention for empirical investigation is the international expansion of family-owned business. Specifically, the relationship between export behavior, family control and board composition in the Latin American context is absent in the literature. Using a large and unique database from Colombian firms (33,249 firms in the period of 2008 to 2013), we provide insightful information on the determinants of export behavior of family firms in emerging markets. Our empirical test confirms an endogenous relation between boards' composition (specifically the presence of independent members) and export behavior in family firms. Firms with a higher participation of independent board members are more likely to exhibit higher levels of exports. A "virtuous cycle" was also detected whereby the introduction of independent members on the board can be expected to boost export behavior, which in turn will encourage the increase of independent members on the board of private firms.

Keywords: export behavior, family firms, corporate boards, Colombia

JEL Classification: F20, G39, J12

Suggested Citation

Herrera-Echeverry, Hernan and Geleilate, Jose and Gaitan Riaño, Sandra Constanza and Jerry, Haar and Soto, Nidia, Export Behavior and Board Independence in Colombian Family Firms: The Reverse Causality Relationship (May 2, 2016). Center for Research in Economics and Finance (CIEF), Working Papers, No. 16-15, Available at SSRN: https://ssrn.com/abstract=2818866 or http://dx.doi.org/10.2139/ssrn.2818866

Hernan Herrera-Echeverry (Contact Author)

Universidad EAFIT - School of Economics and Finance - Center for Research in Economic & Finance (CIEF) ( email )

Carrera 49 No. 7 South - 50
Bogotá
Colombia

Jose Geleilate

Florida International University (FIU) ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

Sandra Constanza Gaitan Riaño

Universidad EAFIT - School of Economics and Finance - Center for Research in Economic & Finance (CIEF) ( email )

Carrera 49 No. 7 South - 50
Bogotá
Colombia

Haar Jerry

Florida International University (FIU) ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

Nidia Soto

Superintendencia de Sociedades ( email )

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