Skip to main content
SpringerLink
Log in

Disentangling the drivers of family firms internationalization through the lens of socioemotional wealth

  • Original Research
  • Published:
Journal of International Entrepreneurship Aims and scope Submit manuscript

Abstract

By conducting a case study on eight large family firms, the aim of this article is to identify push and pull factors motivating family firms to internationalize and how they relate to decision-makers’ risk taking. We identified different types of internationalizing family firms. While some are pushed towards international markets by competition and put at risk the stock of affect-related value that the family has invested in the firm (socioemotional wealth), others face a “mixed gamble” of push and pull factors especially when they are led by non-family managers.

Résumé

Suite à une étude de cas que nous avons réalisé sur huit grandes entreprises familiales, cet article se propose d’identifier les facteurs poussant les entreprises familiales à s’internationaliser et de comprendre comment les risques associés sont gérés. Nous avons identifié différents types d’entreprises familiales internationales. Certaines sont poussées vers les marchés internationaux par la concurrence et mettent en péril le stock de valeurs liées à l’affect que la famille a investi dans l’entreprise (socioemotional wealth). D’autres sont confrontées à un jeu de facteurs multiples, en particulier lorsqu’elles sont dirigées par des managers ne faisant pas partie de la famille.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

Notes

  1. Many studies follow these FIBER dimensions by Berrone et al. (2012). This article makes rather indirect use of specific SEW dimensions and mainly refers to the existing knowledge produced on the role of various non-financial goals for international risk taking.

  2. This paper is based on a research project which has been done in partnership with DEG/KFW (https://www.deginvest.de/International-financing/DEG/).

References

  • Akhter N, Sieger P, Chirico F (2016) If we can’t have it, then no one should: shutting Down Versus Selling in Family Business Portfolios. Strateg Entrep J 10:371–394

    Article  Google Scholar 

  • Anderson E, Gatignon H (1986) Modes of foreign entry: a transaction cost analysis and propositions. J Int Bus Stud 17:1–26

    Article  Google Scholar 

  • Arregle JL, Hitt MA, Sirmon DG, Very P (2007) The development of organizational social capital: attributes of family firms. J Manag Stud 44:73–95

    Article  Google Scholar 

  • Arregle J-L, Naldi L, Nordqvist M, Hitt MA (2012) Internationalization of family-controlled firms: a study of the effects of external involvement in governance. Entrep Theor Pract 36:1115–1143

    Article  Google Scholar 

  • Arregle J-L, Duran P, Hitt MA, van Essen M (2016) Why is family firms’ internationalization unique? A meta-analysis. Entrep Theor Pract, in press

  • Arregle JL, Hitt MA, Mari I (2019) A missing link in family firms’ internationalization research: Family structures. J Int Bus Stud 50(5):809–825

  • Ashforth BE, Mael F (1989) Social identity theory and the organization. Acad Manag Rev 14:20–39

    Article  Google Scholar 

  • Banalieva RE, Eddleston AK (2011) Home-region focus and performance of family firms: the role of family vs non-family leaders. J Int Bus Stud 42:1060–1072

    Article  Google Scholar 

  • Baronchelli G, Bettinelli C, Del Bosco B, Loane S (2016) The impact of family involvement on the investments of Italian small-medium enterprises in psychically distant countries. Int Bus Rev 25:960–970

    Article  Google Scholar 

  • Bauweraerts J (2013) How do private family firms face the crisis? Empirical evidence from Belgium. Int Bus Res 6:91–101

    Article  Google Scholar 

  • Benito-Hernández S, Priede-Bergamini T, López-Cózar-Navarro C (2014) Factors determining exportation and internationalization in family businesses: the importance of debt. S Afr J Bus Manag 45:13–25

    Google Scholar 

  • Berrone P, Cruz C, Gómez-Mejía LR (2012) Socioemotional wealth in family firms theoretical dimensions, assessment approaches, and agenda for future research. Fam Bus Rev 25:258–279

    Article  Google Scholar 

  • Boellis A, Mariotti S, Minichilli A, Piscitello L (2016) Family involvement and firms’ establishment mode choice in foreign markets. J Int Bus Stud 47:929–950

    Article  Google Scholar 

  • Boyd B, Dyhr Ulrich AM (2014) Market entry strategies into the BRIC countries–a comparison of Danish family and non-family businesses. Int J Glob Small Bus 6:15–36

    Article  Google Scholar 

  • Boyd B, Goto T, Hollensen S (2010) Internationalisation of family businesses–evidences from joint venture formations at Danfoss. Int J Manag Pract 4:253–272

    Article  Google Scholar 

  • Calabrò A, Mussolino D (2013) How do boards of directors contribute to family SME export intensity? The role of formal and informal governance mechanisms. J Manag Gov 17:363–403

    Article  Google Scholar 

  • Calabrò A, Minichilli A, Amore MD, Brogi M (2018) The courage to choose! Primogeniture and leadership succession in family firms. Strateg Manag J 39:2014–2035

    Article  Google Scholar 

  • Calof JL, Beamish PW (1995) Adapting to foreign markets: explaining internationalization. Int Bus Rev 4:115–131

    Article  Google Scholar 

  • Carney M (2005) Corporate governance and competitive advantage in family-controlled firms. Entrep Theor Pract 29:249–265

    Article  Google Scholar 

  • Carr C, Bateman S (2009) International strategy configurations of the world’s top family firms. Manag Int Rev 49:733–758

    Article  Google Scholar 

  • Cerrato D, Piva M (2012) The internationalization of small and medium-sized enterprises: the effect of family management, human capital and foreign ownership. J Manag Gov 16:617–644

    Article  Google Scholar 

  • Cesinger B, Hughes M, Mensching H, Bouncken R, Fredrich V, Kraus S (2016) A socioemotional wealth perspective on how collaboration intensity, trust, and international market knowledge affect family firms’ multinationality. J World Bus 51:586–599

    Article  Google Scholar 

  • Chidlow A, Ghauri PN, Yeniyurt S, Cavusgil ST (2015) Establishing rigor in mail-survey procedures in international business research. J World Bus 50:26–35

    Article  Google Scholar 

  • Chirico F (2008) Knowldge accumulation in family firms: evidence from four case studies. Int Small Bus J 26:433–462

    Article  Google Scholar 

  • Chrisman JJ, Memili E, Misra K (2014) Nonfamily managers, family firms, and the winner’s curse: the influence of noneconomic goals and bounded rationality. Entrep Theor Pract 38:1103–1127

    Article  Google Scholar 

  • Chua JH, Chrisman JJ, Steier LP, Rau SB (2012) Sources of heterogeneity in family firms: an introduction. Entrep Theor Pract 36:1103–1113

    Article  Google Scholar 

  • Ciravegna L, Kano L, Rattalino F, Verbeke A (2020) Corporate diplomacy and family firm longevity. Entrep Theor Pract 44(1):109–133

    Article  Google Scholar 

  • Ciravegna L, Kundu SK, Kuivalainen O, Lopez LE (2019) The timing of internationalization–Drivers and outcomes. J Bus Res 105:322–332

  • Claver E, Rienda L, Quer D (2007) The internationalisation process in family firms: choice of market entry strategies. J Gen Manag 33:1–16

    Google Scholar 

  • Claver E, Rienda L, Quer D (2009) Family firms’ international commitment: the influence of family-related factors. Fam Bus Rev 22:125–135

    Article  Google Scholar 

  • Corbin J, Strauss A (2008) Basics of qualitative research: techniques and procedures for developing grounded theory. SAGE Publications, Los Angeles

  • Coval JD, Moskowitz TJ (1999) Home bias at home: local equity preference in domestic portfolios. J Financ 54:2045–2073

    Article  Google Scholar 

  • Creswell JW, Clark VLP (2007) Designing and conducting mixed methods research.

  • Dyer JH, Singh H (1998) The relational view: cooperative strategy and sources of interorganizational competitive advantage. Acad Manag Rev 23:660–679

    Article  Google Scholar 

  • Eddleston KA, Chrisman JJ, Steier LP, Chua JH (2010) Governance and trust in family firms: an introduction. Entrep Theor Pract 34:1043–1056

    Article  Google Scholar 

  • Eddleston KA, Kellermanns FW, Floyd SW, Crittenden VL, Crittenden WF (2013) Planning for growth: life stage differences in family firms. Entrep Theor Pract 37:1177–1202

    Article  Google Scholar 

  • Eddleston KA, Sarathy R, Banalieva ER (2019) When a high-quality niche strategy is not enough to spur family-firm internationalization: the role of external and internal contexts. J Int Bus Stud 50(5):783–808

    Article  Google Scholar 

  • Eisenhardt KM (1989) Building theories from case study research. Acad Manag Rev 14:532–550

    Article  Google Scholar 

  • Eisenhardt KM, Graebner ME (2007) Theory building from cases: opportunities and challenges. Acad Manag J 50:25–32

    Article  Google Scholar 

  • Etemad H (2004) Internationalization of small and medium-sized enterprises: a grounded theoretical framework and an overview. Can J Adm Sci / Revue Canadienne des Sciences de l’Administration 21:1–21

    Google Scholar 

  • Fernández Z, Nieto MJ (2005) Internationalization strategy of small and medium-sized family businesses: Some influential factors. Fam Bus Rev 18:77–89

    Article  Google Scholar 

  • Fernández Z, Nieto MJ (2006) Impact of ownership on the international involvement of SMEs. J Int Bus Stud 37:340–351

    Article  Google Scholar 

  • Finkelstein S, Hambrick D, Cannella AA (2009) Strategic leadership. Oxford University Press, New York

  • Flores RG, Aguilera RV (2007) Globalization and location choice: an analysis of US multinational firms in 1980 and 2000. J Int Bus Stud 38:1187–1210

    Article  Google Scholar 

  • Gibbert M, Ruigrok W (2010) The “what” and “how” of case study rigor: three strategies based on published work. Organ Res Methods 13:710–737

    Article  Google Scholar 

  • Gioia DA, Corley KG, Hamilton AL (2013) Seeking qualitative rigor in inductive research notes on the Gioia methodology. Organ Res Methods 16:15–31

    Article  Google Scholar 

  • Gómez-Mejía LR, Haynes KT, Núñez-Nickel M, Jacobson KJL, Moyano-Fuentes J (2007) Socioemotional wealth and business risks in family-controlled firms: evidence from Spanish olive oil mills. Adm Sci Q 52:106–137

    Article  Google Scholar 

  • Gómez-Mejía LR, Makri M, Kintana ML (2010) Diversification decisions in family-controlled firms. J Manag Stud 47:223–252

    Article  Google Scholar 

  • Gómez-Mejía LR, Cruz C, Berrone P, De Castro J (2011) The bind that ties: socioemotional wealth preservation in family firms. Acad Manag Ann 5:653–707

    Article  Google Scholar 

  • Gómez-Mejía LR, Campbell JT, Martin G, Hoskisson RE, Makri M, Sirmon DG (2014) Socioemotional wealth as a mixed gamble: revisiting family firm R&D investments with the behavioral agency model. Entrep Theor Pract 38:1351–1374

    Article  Google Scholar 

  • Gómez-Mejía LR, Patel PC, Zellweger TM (2015) In the horns of the dilemma: socioemotional wealth, financial wealth, and acquisitions in family firms. J Manag, in press, 0149206315614375

  • Graves C, Thomas J (2006) Internationalization of Australian family businesses: a managerial capabilities perspective. Fam Bus Rev 19:207–224

    Article  Google Scholar 

  • Graves C, Thomas J (2008) Determinants of the internationalization pathways of family firms: an examination of family influence. Fam Bus Rev 21:151–167

    Article  Google Scholar 

  • Habbershon TG, Williams ML (1999) A resource-based framework for assessing the strategic advantages of family firms. Fam Bus Rev 12(1):1–25

  • Hambrick DC, Mason PA (1984) Upper echelons: The organization as a reflection of its top managers. Acad Manag Rev 9:193–206

    Article  Google Scholar 

  • Hennart J-F, Slangen AH (2015) Yes, we really do need more entry mode studies! A commentary on Shaver. J Int Bus Stud 46:114–122

    Article  Google Scholar 

  • Hennart JF, Majocchi A, Forlani E (2019) The myth of the stay-at-home family firm: how family-managed SMEs can overcome their internationalization limitations. J Int Bus Stud 50(5):758–782

    Article  Google Scholar 

  • Hitt MA, Hoskisson RE, Kim H (1997) International diversification: effects on innovation and firm performance in product-diversified firms. Acad Manag J 40:767–798

    Article  Google Scholar 

  • Hofstede G (1984) Culture’s consequences: international differences in work-related values, vol 5. SAGE Publications

  • Johanson J, Vahlne J-E (2009) The Uppsala internationalization process model revisited: from liability of foreignness to liability of outsidership. J Int Bus Stud 40:1411–1431

    Article  Google Scholar 

  • Kano L, Ciravegna L, Rattalino F (2020) The family as a platform for FSA development: enriching new internalization theory with insights from family firm research. J Int Bus Stud:1–13

  • Kano L, Verbeke A (2018) Family firm internationalization: Heritage assets and the impact of bifurcation bias. Glob Strategy J 8(1):158–183

  • Kellermanns FW, Eddleston KA, Zellweger TM (2012) Extending the socioemotional wealth perspective: a look at the dark side. Entrep Theor Pract 36:1175–1182

    Article  Google Scholar 

  • Kets de Vries MFR (1993) The dynamics of family controlled firms: the good and the bad news. Organ Dyn 21:59–71

    Article  Google Scholar 

  • Kontinen T, Ojala A (2010) The internationalization of family businesses: a review of extant research. J Fam Bus Strat 1:97–107

    Article  Google Scholar 

  • Kontinen T, Ojala A (2011) Network ties in the international opportunity recognition of family SMEs. Int Bus Rev 20:440–453

    Article  Google Scholar 

  • Kraus S, Mensching H, Calabrò A, Cheng C-F, Filser M (2016) Family firm internationalization: a configurational approach. J Bus Res 69:5473–5478

    Article  Google Scholar 

  • Leblanc R, Schwartz MS (2007) The black box of board process: gaining access to a difficult subject. Corp Gov Int Rev 15:843–851

    Article  Google Scholar 

  • Liang X, Wang L, Cui Z (2014) Chinese private firms and internationalization: effects of family involvement in management and family ownership. Fam Bus Rev 27:126–141

    Article  Google Scholar 

  • Loehde ASK, Calabrò A, Torchia M, Kraus S (2020) Joint (Ad)ventures—family firms’ international entry mode choices for emerging markets. Int J Entrep Behav Res 26:1235–1258

    Article  Google Scholar 

  • Lubatkin MH, Schulze WS, Ling Y, Dino RN (2005) The effects of parental altruism on the governance of family-managed firms. J Organ Behav 26:313–330

    Article  Google Scholar 

  • Martin G, Gómez-Mejía L (2016) The relationship between socioemotional and financial wealth: re-visiting family firm decision making. Manag Res 14:215–233

    Article  Google Scholar 

  • Miles MB, Huberman AM (1994) Qualitative data analysis: a sourcebook. SAGE Publications, Beverly Hills

  • Miles MB, Huberman AM, Saldana J (2013) Qualitative data analysis: a sourcebook. SAGE Publications

  • Miller D, Le Breton-Miller I, Lester RH (2010) Family ownership and acquisition behavior in publicly-traded companies. Strateg Manag J 31:201–223

    Google Scholar 

  • Miller D, Minichilli A, Corbetta G (2013) Is family leadership always beneficial? Strateg Manag J 34:553–571

    Article  Google Scholar 

  • Minichilli A, Corbetta G, MacMillan IC (2010) Top management teams in family-controlled companies: ‘familiness’,‘faultlines’, and their impact on financial performance. J Manag Stud 47:205–222

    Article  Google Scholar 

  • Minichilli A, Brogi M, Calabrò A (2015) Weathering the storm: family ownership, governance, and performance through the financial and economic crisis. Corp Gov Int Rev 24:552–568

    Article  Google Scholar 

  • Mishra CS, McConaughy DL (1999) Founding family control and capital structure: the risk of loss of control and the aversion to debt. Entrep Theor Pract 23:53–64

    Article  Google Scholar 

  • Musteen M, Francis J, Datta DK (2010) The influence of international networks on internationalization speed and performance: a study of Czech SMEs. J World Bus 45:197–205

    Article  Google Scholar 

  • Naldi L, Davidsson P (2014) Entrepreneurial growth: the role of international knowledge acquisition as moderated by firm age. J Bus Ventur 29:687–703

    Article  Google Scholar 

  • Oviatt BM, McDougall PP (1994) Toward a theory of international new ventures. J Int Bus Stud 25:45–64

    Article  Google Scholar 

  • Patel VK, Pieper TM, Hair JF Jr (2012) The global family business: challenges and drivers for cross-border growth. Bus Horiz 55:231–239

    Article  Google Scholar 

  • Peng MW, Wang DYL, Jiang Y (2008) An institution-based view of international business strategy: a focus on emerging economies. J Int Bus Stud 39:920–936

    Article  Google Scholar 

  • Pongelli C, Caroli MG, Cucculelli M (2016) Family business going abroad: the effect of family ownership on foreign market entry mode decisions. Small Bus Econ 47:787–801

    Article  Google Scholar 

  • Pukall TJ, Calabrò A (2014) The internationalization of family firms: a critical review and integrative model. Fam Bus Rev 27:103–125

    Article  Google Scholar 

  • PWC (2017) The missing middle: Bridging the strategy gap in US family firms. Retreived Access Date|, Access Year|, from URL|

  • Ramón-Llorens MC, García-Meca E, Duréndez A (2017) Influence of CEO characteristics in family firms internationalization. Int Bus Rev 26:786–799

    Article  Google Scholar 

  • Reay T (2014) Publishing qualitative research. Fam Bus Rev 27:95–102

    Article  Google Scholar 

  • Reuber AR (2016) An assemblage-theoretic perspective on the internationalization processes of family firms. Entrep Theor Pract 40:1269–1286

    Article  Google Scholar 

  • Sanchez-Bueno MJ, Usero B (2014) How may the nature of family firms explain the decisions concerning international diversification? J Bus Res 67:1311–1320

    Article  Google Scholar 

  • Santulli R, Torchia M, Calabrò A, Gallucci C (2019) Family ownership concentration and firm internationalization: integrating principal-principal and socioemotional wealth perspectives. J Int Entrep 17:220–248

    Article  Google Scholar 

  • Schramm W (1971) Notes on case studies of instructional media projects. Academy for Educational Development, Washington D.C.

  • Schulze WS, Lubatkin MH, Dino RN (2003) Toward a theory of agency and altruism in family firms. J Bus Ventur 18:473–490

    Article  Google Scholar 

  • Sciascia S, Mazzola P, Astrachan JH, Pieper TM (2012) The role of family ownership in international entrepreneurship: exploring nonlinear effects. Small Bus Econ 38:15–31

    Article  Google Scholar 

  • Sciascia S, Mazzola P, Astrachan JH, Pieper TM (2013) Family involvement in the board of directors: effects on sales internationalization. J Small Bus Manag 51:83–99

    Article  Google Scholar 

  • Singla C, Veliyath R, George R (2014) Family firms and internationalization-governance relationships: evidence of secondary agency issues. Strateg Manag J 35:606–616

    Article  Google Scholar 

  • Sirmon DG, Hitt MA (2003) Managing resources: linking unique resources, management, and wealth creation in family firms. Entrep Theor Pract 27:339–358

    Article  Google Scholar 

  • Strike VM, Berrone P, Sapp SG, Congiu L (2015) A socioemotional wealth approach to CEO career horizons in family firms. J Manag Stud 52:555–583

    Article  Google Scholar 

  • Sui S, Baum M (2014) Internationalization strategy, firm resources and the survival of SMEs in the export market. J Int Bus Stud 45:821–841

    Article  Google Scholar 

  • Swoboda B, Olejnik E (2016) Linking processes and dynamic capabilities of international SMEs: the mediating effect of international entrepreneurial orientation. J Small Bus Manag 54:139–161

    Article  Google Scholar 

  • Tsang EW (2002) Learning from overseas venturing experience: the case of Chinese family businesses. J Bus Ventur 17:21–40

    Article  Google Scholar 

  • Upton N, Teal EJ, Felan JT (2001) Strategic and business planning practices of fast growth family firms. J Small Bus Manag 39:60–72

    Article  Google Scholar 

  • Verbeke A, Kano L (2012) The transaction cost economics theory of the family firm: family-based human asset specificity and the bifurcation bias. Entrep Theor Pract 36:1183–1205

    Article  Google Scholar 

  • Westhead P, Cowling M (1998) Family firm research: the need for a methodological rethink. Entrep Theor Pract 23:31–56

    Article  Google Scholar 

  • Wright M, Filatotchev I, Hoskisson RE, Peng MW (2005) Strategy research in emerging economies: challenging the conventional wisdom. J Manag Stud 42:1–33

    Article  Google Scholar 

  • Yin RK (2013) Case study research: design and methods, vol 5, 5th edn. SAGE Publications, London

  • Zaefarian R, Eng T-Y, Tasavori M (2016) An exploratory study of international opportunity identification among family firms. Int Bus Rev 25:333–345

    Article  Google Scholar 

  • Zahra SA (2003) International expansion of U.S. manufacturing family businesses: the effect of ownership and involvement. J Bus Ventur 18:495–512

    Article  Google Scholar 

Download references

Acknowledgements

We would like to thank the three anonymous referees and the editor, Prof. Hamid Etemad, for supporting and guiding us through their valuable comments.

Author information

Authors and Affiliations

  1. The European Foundry Association, CAEF, Düsseldorf, Germany

    Fynn-Willem Lohe

  2. Witten Institute for Family Business, University of Witten/Herdecke, Alfred-Herrhausen-Strasse 50, 58448, Witten, Germany

    Fynn-Willem Lohe

  3. IPAG Entrepreneurship & Family Business Center, IPAG Business School, 4 bd Carabacel, 06000, Nice, France

    Andrea Calabrò

  4. International University of Monaco, INSEEC U Research Center, 14, Rue Hubert Clerissi, 98000, Monte Carlo, Monaco

    Mariateresa Torchia

Authors
  1. Fynn-Willem Lohe
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Andrea Calabrò
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Mariateresa Torchia
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Andrea Calabrò.

Additional information

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Lohe, FW., Calabrò, A. & Torchia, M. Disentangling the drivers of family firms internationalization through the lens of socioemotional wealth. J Int Entrep 19, 479–509 (2021). https://doi.org/10.1007/s10843-021-00284-w

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10843-021-00284-w

Keywords

Search

Navigation