Variable selection for classification and forecasting of the family firm's socioemotional wealth

Socioemotional wealth (SEW) refers to those family-centered goals that are likely have a major influence on the strategic decision-making process and performance of family firms. Many studies used indirect indicators related involvement in ownership management measure SEW; meanwhile, others developed scales directly level importance SEW Limitations both direct measures lead empirical research be under threat. In current study, we use random forests identify important financial economic decisions, as well family-related measures, for explaining firms' design good prediction model using smallest set nonredundant indicators. Our results show exhibits minimum out-of-bag sample (OOB) error rate includes variables refer presence members firm's positions, long-term nonfinancial debt, personnel expenditures, investments, short-term average storage period, accounts receivables. For prediction, with reasonably low estimated classification only three variables, which