Family firms are often portrayed as an important yet conservative form of organization that is reluctant to invest in innovation; however, simultaneously, evidence has shown family flourishing and fact constitute many the world's most innovative firms. Our study contributes disentangling this puzzling effect. We argue firms—owing family's high level control over firm, wealth concentration, importance nonfinancial goals—invest less innovation but have increased conversion rate input into...

Family firms are thought to pursue nonfinancial goals that provide socioemotional wealth, but wealth is feasible only with family control of the firm. Using prospect theory, we hypothesize increases extent current control, duration and intentions for transgenerational thus adding price at which owners would be willing sell their nonfamily buyers. Findings from two countries show has no impact, a mixed impact. However, intention consistently positive impact on perceived acceptable selling price.

This paper develops an organizational identity–based rationale for why family firms strive nonfinancial goals. We show that the visibility of in firm, transgenerational sustainability intentions family, and capability firm self–enhancement positively influence importance identity fit between as well family's concern corporate reputation. suggest reputation leads to pursue goals benefit nonfamily stakeholders. also discuss reinforcing feedback loops these processes.

Whereas existing research on the longevity of family firms has focused survival firms, this article investigates transgenerational entrepreneurship families. By building framework, authors argue that by shifting from firm to level analysis, one gains a deeper understanding firms’ ability create value across generations. The find evidence for their argument in such shift reveals extended entrepreneurial activity, which is missed when focusing exclusively level. study introduces and...

We posit that family firms often face a dilemma in their strategic decision making: whether to maintain current socioemotional wealth or pursue prospective financial wealth. Applying such mixed gamble perspective acquisitions, owners assess potential acquisitions with regard impact on both dimensions. In line this reasoning, our results show control implies general reluctance acquire and, when an acquisition happens, preference for related targets. Because and viewpoints lead largely...

Recent literature (McNulty, Yeh, Schulze, & Lubatkin, 2002) states that the assumptions behind capital asset pricing model, in particular irrelevance of time horizon, do not correspond to characteristics firms prefer long-term investment horizons. I show family display a longer horizon than most their nonfamily counterparts, since (1) CEO tenure, (2) this type firm strives for independence and succession within family, (3) due fact are overrepresented on western European stock markets...

This article examines how owners of firms subjectively value their ownership stake in monetary terms. We utilize endowment and possession attachment literature to investigate emotional benefits costs related organizational affect value. define as that part willingness accept unexplained by the financial private control accruing owner. Our research provides new insight into firm owners' psychology considerations where an owner values nonfinancial aspects stake.

We extend the socioemotional wealth (SEW) perspective by arguing that SEW can be negatively associated with proactive stakeholder engagement (PSE). further suggest dimensions positive or negative valence. Lastly, we propose valenced lead to family–centric behavior, which affects PSE. This multifaceted conceptualization of allows us explain how family firms partake in harmful behaviors despite having seemingly strong SEW. Our paper suggests either an affective endowment burden for and their...

This article examines how owners of firms subjectively value their ownership stake in monetary terms. We utilize endowment and possession attachment literature to investigate emotional benefits costs related organizational affect value. define as that part willingness accept unexplained by the financial private control accruing owner. Our research provides new insight into firm owners' psychology considerations where an owner values nonfinancial aspects stake.

Drawing from stewardship theory, we investigated corporate entrepreneurship in family firms. We argued that culture determinants––comprehensive strategic decision making, participative governance, long–term orientation, and human capital––differentiate the most entrepreneurial Based on a study of 179 firms, showed comprehensive making orientation contribute to entrepreneurship. Additionally, family–to–firm unity enhanced positive effects governance have While found can compensate for low...

Family firms employ about 60% of the global workforce. While it is widely assumed that they are good employers, data their conduct mixed. In this study, we extend stewardship and agency theories to test competing propositions impact family on employment practices using from 14,961 private Belgian over a 19-year period. Higher investments, lower dividend payout, higher risk tolerance indicate better financial stewards companies than nonfamily firms. However, worse organizational firms: offer...

We advance a dynamic institution-based view of the firm that extends theory's current focus on scope pro-market reforms (degree market liberalization in given year) to consider how speed (rate achieved over time) affects performance firms from transitioning economies. Utilizing sample public Chinese provinces with varying reform speeds, we find while positively impacts performance, detracts performance. further family have an advantage gradually reforming provinces, non-family rapidly...

We demonstrate how latent profile analysis (LPA) can be applied to generate profiles (i.e., homogenous subgroups) in a sample of family firms. In doing so, we highlight LPA provide additional insight into firm phenomena when used conjunction with other methodological approaches regression). compare techniques cluster and qualitative comparative analysis) show LPA’s superior ability capture complex patterns important characteristics. linked differences dependent variables, providing scholars...

Building on pragmatism, we advance an entrepreneur-as-scientist perspective and depict entrepreneurs as engaging in causally inferential action by forming beliefs, testing these responding to the feedback received. However, this sequence of entrepreneurial actions arrives with a set companion doubts, namely doubt about product-market fit because entrepreneurs’ beliefs are self-chosen, validity from false positives or negatives, over- underfitting responses feedback. We discuss rationality...

Through the lens of stakeholder theory, this article deepens our understanding financial and nonfinancial performance outcomes in family firms across multiple categories, including level analysis. Based on foundation, we develop a typology relationships between outcomes: overlapping, causal, synergistic, substitutional. We argue that these relationships, when used constructive (positive) outcomes, are able to increase satisfaction, which turn increases organizational effectiveness. analysis,...

Through the lens of stakeholder theory, this article deepens our understanding financial and nonfinancial performance outcomes in family firms across multiple categories, including level analysis. Based on foundation, we develop a typology relationships between outcomes: overlapping, causal, synergistic, substitutional. We argue that these relationships, when used constructive (positive) outcomes, are able to increase satisfaction, which turn increases organizational effectiveness. analysis,...

Abstract The phenomenon of portfolio entrepreneurship has attracted considerable scholarly attention and is particularly relevant in the family firm context. However, there a lack knowledge process through which develops firms. We address this gap by analyzing four in‐depth, longitudinal case studies from Europe Latin America. Using resource‐based perspective, we identify six distinct resource categories that are to process. Furthermore, reveal their importance varies across time. Our...

Abstract Principals who delegate tasks to agents face the perennial challenge of overcoming agency problems. We investigate whether feelings ownership among senior managers in absence formal can align agents' interests with those principals, thus turning into psychological principals. Using a moderated mediation model, we find that is positively related company performance through mediating effect individual‐level entrepreneurial behaviour. also on behaviour and, ultimately, weaker for high...

Drawing on the affect infusion model from cognitive psychology, authors develop a conceptual framework that explains how related to corporate ownership influences formation of socioemotional wealth perceptions among family firm owners, reflected in altered subjective value for stake. The explore target, personal, and situational features valuation process stake explain these factors mediate relationship between perceptions. They further understanding about level bias owners’ assessments...