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How perceived risk and return interacts with familism to influence individuals’ investment strategies: The case of capital seeking and capital providing behavior in new venture financing

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Abstract

Drawing on social capital and agency theories and using a multi-study research design, this study examined how perceived risk and return interacts with familism to influence individuals’ investment strategies in new venture financing, both capital seeking and capital providing behavior. We found that individuals high in familism are more likely to seek capital from and provide capital to family members than non-family members for new ventures. However, such relationships are more complex than prior research suggests because when individuals’ risk and return perceptions are included these interact with familism to differentially influence capital financing behavior directed at family versus non-family members. Contributions to theory and potential avenues for future research are discussed.

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  1. Bello et al. (2009) found student samples appropriate, especially when multiple attempts are being made to address a specific research question.

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Authors and Affiliations

  1. Department of International Business and Management, University of Nottingham Ningbo China, 199 Taikang East Road, Ningbo, 315100, China

    Thomas A. Birtch & Peter S. Hofman

  2. Institute for Manufacturing, University of Cambridge, 17 Charles Babbage Road, Cambridge, CB3 0FS, UK

    Thomas A. Birtch

  3. Department of Management, The Chinese University of Hong Kong, No.12, Chak Cheung Street, Shatin, Hong Kong

    Kevin Yuk-fai Au

  4. Department of Management, Hong Kong Baptist University, 34 Renfrew Road, Kowloon Tong, Hong Kong

    Flora F. T. Chiang

  5. Department of Organizational Behavior and Human Resource Management, China Europe International Business School (CEIBS), Hongfeng Road, Pudong Xinqu, Shanghai, 201203, China

    Flora F. T. Chiang

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  1. Thomas A. Birtch
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  2. Kevin Yuk-fai Au
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  3. Flora F. T. Chiang
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  4. Peter S. Hofman
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Correspondence to Flora F. T. Chiang.

Appendix

Appendix

Instructions and one of the scenarios used in the policy capturing study (Study 3).

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Birtch, T.A., Au, K.Yf., Chiang, F.F.T. et al. How perceived risk and return interacts with familism to influence individuals’ investment strategies: The case of capital seeking and capital providing behavior in new venture financing. Asia Pac J Manag 35, 471–500 (2018). https://doi.org/10.1007/s10490-017-9525-0

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