Family Firms’ Financial Decisions in Central-Eastern Europe

Family firms are a crucial part of the global economy, contributing significantly to GDP and employ- ment. However, there is a substantial gap in understanding the financial decisions of family firms in Central and Eastern European (CEE) countries. This project aims to bridge this gap by exploring how family firms in CEE countries approach different financial decisions. The business environment in CEE countries has been uniquely shaped by historical events, such as the influence of communism and the transition to a free market economy. These factors distinguish CEE countries from their Western counterparts, making it essential to study them independently. Existing research on family firms primarily focuses on Western nations, leaving a void in the context of CEE countries. Mergers and Acquisitions (M&A): Family firms often show reluctance towards buying other compa- nies due to the desire to maintain control and avoid the risks associated with integrating unre- lated businesses. This project will investigate if this holds true in CEE countries and how it im- pacts their financial performance. Corporate Social Responsibility (CSR): Based on Western studies and theoretical considerations, family firms tend to exhibit a heightened focus on social and environmental concerns among other things to protect the family reputation. The project will examine the extent of CSR activities in CEE family firms and their influence on financial outcomes. Digital Innovation: Despite the potential benefits of digital innovation, family firms may be slow to adopt new technologies due to their conservative nature. This project will explore how family firms in CEE countries are embracing digital transformation and its impact on financial perfor- mance. The study will analyse publicly listed companies in several CEE countries. It will employ various quantitative methods to assess the relationship between family ownership and financial decisions. By examining annual reports, financial statements, and other corporate documents, the project aims to provide a comprehensive understanding of these critical areas. The findings will offer valuable insights for both practitioners (e.g., family firm owners, managers, advisors) and policymakers. From an academic perspective, this project will provide new results on CEE markets, enable cross-country comparisons, and advance research on emerging markets and associated theories. This project is a three-year joint collaboration between researchers from Johannes Kepler University (JKU) in Linz, Austria, and the Maria Curie-Sklodowska University in Lublin, Poland. The collabora- tion brings together a diverse team of experts with complementary skills and perspectives.