From a mixed gamble perspective, we contend that family firms (FFs) with different family shareholder structures are confronted with different trade-offs among current and prospective financial and socioemotional wealth (SEW), leading to differences in their international acquisition choices. We also explore the moderating role of family leadership and performance aspirations. Our findings show that FFs with a dominant family owner are more likely to pursue international acquisitions, especially when FFs are led by a family CEO or when they experience below-target performance, as in such cases, they prioritize prospective financial and SEW gains, thereby sacrificing current SEW and financial wealth.
AchtenhagenL.BrunningeO.MelinL. (2017). Patterns of dynamic growth in medium-sized companies: Beyond the dichotomy of organic versus acquired growth. Long Range Planning, 50(4), 457–471.
2.
AmoreM. D.MinichilliA.CorbettaG. (2011). How do managerial successions shape corporate financial policies in family firms?Journal of Corporate Finance, 17(4), 1016–1027.
3.
AndersonR. C.ReebD. M. (2003). Founding-family ownership and firm performance: Evidence from the S&P 500. Journal of Finance, 58(3), 1301–1328.
4.
ArregleJ. L.HittM. A.SirmonD. G.VeryP. (2007). The development of organizational social capital: Attributes of family firms. Journal of Management Studies, 44(1), 73–95.
5.
BarkemaH. G.VermeulenF. (1998). International expansion through start-up or acquisition: A learning perspective. Academy of Management journal, 41(1), 7–26.
6.
BasuilD. A.DattaD. K. (2015). Effects of industry- and region-specific acquisition experience on value creation in cross-border acquisitions: The moderating role of cultural similarity. Journal of Management Studies, 52(6), 766–795.
7.
BauerF.MatzlerK. (2014). Antecedents of M&A success: The role of strategic complementarity, cultural fit, and degree and speed of integration. Strategic Management Journal, 35(2), 269–291.
8.
BerroneP.CruzC.Gómez-MejíaL. R. (2012). Socioemotional wealth in family firms theoretical dimensions, assessment approaches, and agenda for future research. Family Business Review, 25(3), 258–279.
9.
BettinazziE. L.MillerD.AmoreM. D.CorbettaG. (2020). Ownership similarity in mergers and acquisitions target selection. Strategic Organization, 18(2), 330–361.
10.
BillingerS.StieglitzN.SchumacherT. R. (2014). Search on rugged landscapes: An experimental study. Organization Science, 25(1), 93–108.
11.
BoellisA.MariottiS.MinichilliA.PiscitelloL. (2016). Family involvement and firms’ establishment mode choice in foreign markets. Journal of International Business Studies, 47(8), 929–950.
CalabròA.MinichilliA.AmoreM. D.BrogiM. (2018). The courage to choose! Primogeniture and leadership succession in family firms. Strategic Management Journal, 39(7), 2014–2035.
14.
CalabròA.TorchiaM.PukallT.MussolinoD. (2013). The influence of ownership structure and board strategic involvement on international sales: The moderating effect of family involvement. International Business Review, 22(3), 509–523.
15.
CannellaA. A.JonesC. D.WithersM. C. (2015). Family-versus lone-founder-controlled public corporations: Social identity theory and boards of directors. Academy of Management Journal, 58(2), 436–459.
16.
CaprioL.CrociE.Del GiudiceA. (2011). Ownership structure, family control, and acquisition decisions. Journal of Corporate Finance, 17(5), 1636–1657.
17.
CapronL. (1999). The long-term performance of horizontal acquisitions. Strategic Management Journal, 20(11), 987–1018.
18.
CarrC.BatemanS. (2009). International strategy configurations of the world’s top family firms. Management International Review, 49(6), 733–758.
19.
CennamoC.BerroneP.CruzC.Gómez-MejíaL. R. (2012). Socioemotional wealth and proactive stakeholder engagement: Why family-controlled firms care more about their stakeholders. Entrepreneurship Theory and Practice, 36(6), 1153–1173.
20.
ChenW.-R. (2008). Determinants of firms’ backward- and forward-looking R&D search behavior. Organization Science, 19(4), 609–622.
21.
CheungY. L.KongD.TanW.WangW. (2015). Being good when being international in an emerging economy: The case of China. Journal of Business Ethics, 130(4), 805–817.
22.
ChrismanJ. J.PatelP. C. (2012). Variations in R&D investments of family and nonfamily firms: Behavioral agency and myopic loss aversion perspectives. Academy of Management Journal, 55(4), 976–997.
23.
ChuaJ. H.ChrismanJ. J.SteierL. P.RauS. B. (2012). Sources of heterogeneity in family firms: An introduction. Entrepreneurship Theory and Practice, 36(6), 1103–1113.
24.
CollinsJ. D.HolcombT. R.CertoS. T.HittM. A.LesterR. H. (2009). Learning by doing: Cross-border mergers and acquisitions. Journal of Business Research, 62(12), 1329–1334.
25.
ConnellyB. L.HoskissonR. E.TihanyiL.CertoS. T. (2010). Ownership as a form of corporate governance. Journal of Management Studies, 47(8), 1561–1589.
26.
CruzC. C.Gómez-MejiaL. R.BecerraM. (2010). Perceptions of benevolence and the design of agency contracts: CEO-TMT relationships in family firms. Academy of Management Journal, 53(1), 69–89.
27.
CyertR. M.MarchJ. G. (1963). A behavioral theory of the firm. Prentice Hall.
28.
DebellisF.RondiE.PlakoyiannakiE.De MassisA. (2021). Riding the waves of family firm internationalization: A systematic literature review, integrative framework, and research agenda. Journal of World Business, 56(1), 101144.
29.
DebickiB. J.KellermannsF. W.ChrismanJ. J.PearsonA. W.SpencerB. A. (2016). Development of a socioemotional wealth importance (SEWi) scale for family firm research. Journal of Family Business Strategy, 7(1), 47–57.
30.
DefrancqC.HuyghebaertN.LuypaertM. (2016). Influence of family ownership on the industry-diversifying nature of a firm’s M&A strategy: Empirical evidence from Continental Europe. Journal of Family Business Strategy, 7(4), 210–226.
31.
De MassisA.ChiricoF.KotlarJ.NaldiL. (2014). The temporal evolution of proactiveness in family firms: The horizontal S-curve hypothesis. Family Business Review, 27(1), 35–50.
32.
De MassisA.FrattiniF.MajocchiA.PiscitelloL. (2018). Family firms in the global economy: Toward a deeper understanding of internationalisation determinants, processes and outcomes. Global Strategy Journal, 8(1), 3–21.
33.
DemsetzH.LehnK. (1985). The structure of corporate ownership: Causes and consequences. Journal of Political Economy, 93(6), 1155–1177.
34.
FelthamT. S.FelthamG.BarnettJ. J. (2005). The dependence of family businesses on a single decision-maker. Journal of Small Business Management, 43(1), 1–15.
35.
FernándezZ.NietoM. J. (2005). Internationalization strategy of small and medium-sized family businesses: Some influential factors. Family Business Review, 18(1), 77–89.
36.
Feito-RuizI.Menéndez-RequejoS. (2010). Family firm mergers and acquisitions in different legal environments. Family Business Review, 23(1), 60–75.
37.
FrankH.KesslerA.NoséL.SuchyD. (2011). Conflicts in family firms: State of the art and perspectives for future research. Journal of Family Business Management, 1(2), 130–153.
38.
GamacheD. L.McNamaraG.MannorM. J.JohnsonR. E. (2015). Motivated to acquire? The impact of CEO regulatory focus on firm acquisitions. Academy of Management Journal, 58(4), 1261–1282.
39.
GeppertM.DörrenbächerC.GammelgaardJ.TaplinI. (2013). Managerial risk-taking in international acquisitions in the brewery industry: Institutional and ownership influences compared. British Journal of Management, 24(3), 316–332.
40.
Gómez-MejíaL. R.CampbellJ. T.MartinG.HoskissonR. E.MakriM.SirmonD. G. (2014). Socioemotional wealth as a mixed gamble: Revisiting family firm R&D investments with the behavioral agency model. Entrepreneurship Theory and Practice, 38(6), 1351–1374.
41.
Gomez–MejiaL. R.CampbellJ. T.MartinG.HoskissonR. E.MakriM.SirmonD. G. (2014). Socioemotional wealth as a mixed gamble: Revisiting family firm R&D investments with the behavioral agency model. Entrepreneurship Theory and Practice, 38(6), 1351–1374.
42.
Gómez-MejíaL. R.CruzC.BerroneP.De CastroJ. (2011). The bind that ties: Socioemotional wealth preservation in family firms. Academy of Management Annals, 5(1), 653–707.
43.
Gómez-MejíaL. R.CruzC.ImperatoreC. (2014). Financial reporting and the protection of socioemotional wealth in family-controlled firms. European Accounting Review, 23(3), 387–402.
44.
Gómez-MejíaL. R.HaynesK. T.Núñez-NickelM.JacobsonK. J. L.Moyano-FuentesJ. (2007). Socioemotional wealth and business risks in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52(1), 106–137.
45.
Gómez-MejíaL. R.MakriM.KintanaM. L. (2010). Diversification decisions in family-controlled firms. Journal of Management Studies, 47(2), 223–252.
46.
Gómez-MejíaL. R.PatelP. C.ZellwegerT. M. (2018). In the horns of the dilemma: Socioemotional wealth, financial wealth, and acquisitions in family firms. Journal of Management, 44(4), 1369–1397.
47.
Gómez-MejíaL. R.WisemanR. M. (2016). Bridging finance and behavioral scholarship on agent risk sharing and risk taking. Academy of Management Perspectives, 30(4), 349–368.
48.
GreveH. R. (1998). Performance, aspirations, and risky organizational change. Administrative Science Quarterly, 43(1), 58–86.
49.
GuQ.LuJ. W.ChungC. N. (2019). Incentive or disincentive? A socioemotional wealth explanation of new industry entry in family business groups. Journal of Management, 45(2), 645–672.
50.
HairJ. F.BlackW. C.BabinB. J.AndersonR. E.TathamR. L. (2006). Multivariate data analysis (Vol. 6). Pearson.
51.
HaleblianJ.DeversC. E.McNamaraG.CarpenterM. A.DavisonR. B. (2009). Taking stock of what we know about mergers and acquisitions: A review and research agenda. Journal of Management, 35(3), 469–502.
52.
HauckJ.Suess-ReyesJ.BeckS.PrüglR.FrankH. (2016). Measuring socioemotional wealth in family-owned and-managed firms: A validation and short form of the FIBER Scale. Journal of Family Business Strategy, 7(3), 133–148.
53.
HittM. A.TihanyiL.MillerT.ConnellyB. (2006). International diversification: Antecedents, outcomes, and moderators. Journal of Management, 32(6), 831–867.
54.
HoskissonR. E.ChiricoF.ZyungJ.GambetaE. (2017). Managerial risk taking: A multi-theoretical review and future research agenda. Journal of Management, 43(1), 137–169.
55.
HussingerK.IssahA. B. (2019). Firm acquisitions by family firms: A mixed gamble approach. Family Business Review, 32(4), 354–377.
56.
IyerD. N.MillerK. D. (2008). Performance feedback, slack, and the timing of acquisitions. Academy of Management Journal, 51(4), 808–822.
57.
JiangY.PengM. W. (2011). Principal-principal conflicts during crisis. Asia Pacific Journal of Management, 28(4), 683–695.
58.
KahnemanD.TverskyA. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291.
59.
KidwellR. E.KellermannsF. W.EddlestonK. A. (2012). Harmony, justice, confusion, and conflict in family firms: Implications for ethical climate and the “Fredo effect.”Journal of Business Ethics, 106(4), 503–517.
60.
KimJ.-Y.FinkelsteinS.HaleblianJ. (2015). All aspirations are not created equal: The differential effects of historical and social aspirations on acquisition behavior. Academy of Management Journal, 58(5), 1361–1388.
61.
KimJ.-Y.HaleblianJ.FinkelsteinS. (2011). When firms are desperate to grow via acquisition: The effect of growth patterns and acquisition experience on acquisition premiums. Administrative Science Quarterly, 56(1), 26–60.
62.
KlierH.SchwensC.ZapkauF. B.DikovaD. (2017). Which resources matter how and where? A meta-analysis on firms’ foreign establishment mode choice. Journal of Management Studies, 54(3), 304–339.
63.
KotlarJ.SignoriA.MassisA. D.VismaraS. (2018). Financial wealth, socioemotional wealth, and IPO underpricing in family firms: A two-stage gamble model. Academy of Management Journal, 61(3), 1073–1099.
64.
KrishnanH. A.HittM. A.ParkD. (2007). Acquisition premiums, subsequent workforce reductions and post-acquisition performance. Journal of Management Studies, 44(5), 709–732.
65.
LeeK.MakriM.ScanduraT. (2019). The effect of psychological ownership on corporate entrepreneurship: Comparisons between family and nonfamily top management team members. Family Business Review, 32(1), 10–30.
66.
LeitterstorfM. P.RauS. B. (2014). Socioemotional wealth and IPO underpricing of family firms. Strategic Management Journal, 35(5), 751–760.
67.
LeitterstorfM. P.WachterM. M. (2016). Takeover premiums and family blockholders. Family Business Review, 29(2), 214–230.
68.
LevinthalD.MarchJ. G. (1981). A model of adaptive organizational search. Journal of Economic Behavior & Organization, 2(4), 307–333.
69.
LevyJ. S. (1992). An introduction to prospect theory. Political Psychology, 13(2), 171–186.
LiS.WuH.SongX. (2017). Principal–principal conflicts and corporate philanthropy: Evidence from Chinese private firms. Journal of Business Ethics, 141(3), 605–620.
72.
LimE. N.LubatkinM. H.WisemanR. M. (2010). A family firm variant of the behavioral agency theory. Strategic Entrepreneurship Journal, 4(3), 197–211.
73.
LinW.-T. (2014). How do managers decide on internationalization processes? The role of organizational slack and performance feedback. Journal of World Business, 49(3), 396–408.
74.
LockettA.WiklundJ.DavidssonP.GirmaS. (2011). Organic and acquisitive growth: Re-examining, testing and extending Penrose’s growth theory. Journal of Management Studies, 48(1), 48–74.
75.
LuJ. W.BeamishP. W. (2004). International diversification and firm performance: The S-curve hypothesis. Academy of Management Journal, 47(4), 598–609.
76.
MalhotraS.MorganH. M.ZhuP. (2018). Sticky decisions: Anchoring and equity stakes in international acquisitions. Journal of Management, 44(8), 3200–3230.
77.
MarquesP.PresasP.SimonA. (2014). The heterogeneity of family firms in CSR engagement: The role of values. Family Business Review, 27(3), 206–227.
78.
MartinG. P.Gómez-MejíaL. R. (2016). The relationship between socioemotional and financial wealth: Re-visiting family firm decision making. Management Research, 14(3), 215–233.
79.
MartinG. P.Gómez-MejíaL. R.WisemanR. (2013). Strategic implications of CEO compensation design: Revisiting the behavioral agency model. Academy of Management Journal, 56(2), 451–472.
80.
MartinG. P.Gómez-MejíaL. R.MakriM.BerroneP. (2017). Conflict between controlling family owners and minority shareholders: Much ado about nothing. Entrepreneurship Theory and Practice, 41(6), 999–1027.
81.
MattaE.BeamishP. W. (2008). The accentuated CEO career horizon problem: Evidence from Iiternational acquisitions. Strategic Management Journal, 29(7), 683–700.
82.
McNamaraG. M.HaleblianJ.DykesB. J. (2008). The perfomance implications of participating in an acquisition wave: Early mover advantages, bandwagon effects, and the moderating influence of industry characteristics and acquirer tactics. Academy of Management Journal, 51(1), 113–130.
83.
Menendez-RequejoS. (2005). Growth and internationalisation of family businesses. International Journal of Globalisation and Small Business, 1(2), 122–133.
84.
MeyerC. B. (2008). Value leakages in mergers and acquisitions: Why they occur and how they can be addressed. Long Range Planning, 41(2), 197–224.
85.
MeyerK. E.TranY. T. T. (2006). Market penetration and acquisition strategies for emerging economies. Long Range Planning, 39(2), 177–197.
86.
MillerD.AmoreM. D.Le Breton-MillerI.MinichilliA.QuaratoF. (2018). Strategic distinctiveness in family firms: Firm institutional heterogeneity and configurational multidimensionality. Journal of Family Business Strategy, 9(1), 16–26.
87.
MillerD.Le Breton-MillerI. (2014). Deconstructing socioemotional wealth. Entrepreneurship Theory and Practice, 38(4), 713–720.
88.
MillerD.Le Breton-MillerI.LesterR. H. (2010). Family ownership and acquisition behavior in publicly-traded companies. Strategic Management Journal, 31(2), 201–223.
89.
MillerD.Le Breton-MillerI.LesterR. H.CannellaA. A. (2007). Are family firms really superior performers?Journal of Corporate Finance, 13(5), 829–858.
90.
MillerD.Le Breton-MillerI.MinichilliA.CorbettaG.PittinoD. (2014). When do non-family CEOs outperform in family firms? Agency and behavioural agency perspectives. Journal of Management Studies, 51(4), 547–572.
91.
MillerD.MinichilliA.CorbettaG. (2013). Is family leadership always beneficial?Strategic Management Journal, 34(5), 553–571.
92.
MinichilliA.BrogiM.CalabròA. (2016). Weathering the storm: Family ownership, governance, and performance through the financial and economic crisis. Corporate Governance: An International Review, 24(6), 552–568.
93.
MinichilliA.NordqvistM.CorbettaG.AmoreM. D. (2014). CEO succession mechanisms, organizational context, and performance: A socio-emotional wealth perspective on family-controlled firms. Journal of Management Studies, 51(7), 1153–1179.
94.
MiozzoM.DiVitoL.DesyllasP. (2016). When do acquirers invest in the R&D assets of acquired science-based firms in cross-border acquisitions? The role of technology and capabilities similarity and complementarity. Long Range Planning, 49(2), 221–240.
95.
NaldiL.DavidssonP. (2014). Entrepreneurial growth: The role of international knowledge acquisition as moderated by firm age. Journal of Business Venturing, 29(5), 687–703.
96.
NeckebrouckJ.SchulzeW.ZellwegerT. M. (2018). Are family firms good employers?Academy of Management Journal, 61(2), 553–585.
97.
NordqvistM.SharmaP.ChiricoF. (2014). Family firm heterogeneity and governance: A configuration approach. Journal of Small Business Management, 52(2), 192–209.
98.
PongelliC.CalabròA.BascoR. (2018). Family firms’ international make-or-buy decisions: Captive offshoring, offshore outsourcing, and the role of home region focus. Journal of Business Research, 103, 596–606.
99.
PukallT. J.CalabròA. (2014). The internationalization of family firms: A critical review and integrative model. Family Business Review, 27(2), 103–125.
100.
PurkayasthaS.VeliyathR.GeorgeR. (2019). The roles of family ownership and family management in the governance of agency conflicts. Journal of Business Research, 98, 50–64.
101.
RajagopalanN.SpreitzerG. M. (1997). Toward a theory of strategic change: A multi-lens perspective and integrative framework. Academy of Management Review, 22(1), 48–79.
102.
SalvatoC.MinichilliA.PiccarretaR. (2012). Faster route to the CEO suite: Nepotism or managerial proficiency?Family Business Review, 25(2), 206–224.
103.
SchulzeW. S.KellermannsF. W. (2015). Reifying socioemotional wealth. Entrepreneurship Theory and Practice, 39(3), 447–459.
104.
SchulzeW. S.LubatkinM. H.DinoR. N. (2003). Exploring the agency consequences of ownership dispersion among the directors of private family firms. Academy of Management Journal, 46(2), 179–194.
105.
SethA.SongK. P.PettitR. R. (2002). Value creation and destruction in cross-border acquisitions: An empirical analysis of foreign acquisitions of U.S. firms. Strategic Management Journal, 23(10), 921–940.
106.
SingalM.SingalV. (2011). Concentrated ownership and firm performance: Does family control matter?Strategic Entrepreneurship Journal, 5(4), 373–396.
107.
SirmonD. G.HittM. A. (2003). Managing resources: Linking unique resources, management, and wealth creation in family firms. Entrepreneurship Theory and Practice, 27(4), 339–358.
108.
SouderD.ZaheerA.SapienzaH.RanucciR. (2017). How family influence, socioemotional wealth, and competitive conditions shape new technology adoption. Strategic Management Journal, 38(9), 1774–1790.
109.
StawB. M.SandelandsL. E.DuttonJ. E. (1981). Threat rigidity effects in organizational behavior: A multilevel analysis. Administrative Science Quarterly, 26(4), 501–524.
110.
StockmansA.LybaertN.VoordeckersW. (2010). Socioemotional wealth and earnings management in private family firms. Family Business Review, 23, 280–294.
111.
StrikeV. M.BerroneP.SappS. G.CongiuL. (2015). A socioemotional wealth approach to CEO career horizons in family firms. Journal of Management Studies, 52(4), 555–583.
112.
SuttonC.VeliyathR.PieperT. M.HairJ. F.Jr.CaylorM. (2018). Secondary agency conflicts: A synthesis and proposed measurement model. Long Range Planning, 51(5), 720–735.
113.
SwabR. G.SherlockC.MarkinE.DibrellC. (2020). “SEW” what do we know and where do we go? A review of socioemotional wealth and a way forward. Family Business Review, 33(4), 424–445.
114.
ThomsenS.PedersenT. (2000). Ownership structure and economic performance in the largest European companies. Strategic Management Journal, 689, 689–705.
115.
VaaraE.SaralaR.StahlG. K.BjörkmanI. (2012). The impact of organizational and national cultural differences on social conflict and knowledge transfer in international acquisitions. Journal of Management Studies, 49(1), 1–27.
116.
VandekerkhofP.SteijversT.HendriksW.VoordeckersW. (2018). Socio-emotional wealth separation and decision-making quality in family firm TMTs: The moderating role of psychological safety. Journal of Management Studies, 55(4), 648–676.
117.
Van DoornS.TretbarT.ReimerM.HeydenM. (2020). Ambidexterity in family firms: The interplay between family influences within and beyond the executive suite. Long Range Planning, 55(2), 101998.
118.
VardamanJ. M.GondoM. B. (2014). Socioemotional wealth conflict in family firms. Entrepreneurship Theory and Practice, 38(6), 1317–1322.
119.
VillalongaB.AmitR. (2006). How do family ownership, control and management affect firm value?Journal of Financial Economics, 80(2), 385–417.
120.
WennbergK.WiklundJ.HellerstedtK.NordqvistM. (2011). Implications of intra-family and external ownership transfer of family firms: Short-term and long-term performance differences. Strategic Entrepreneurship Journal, 5(4), 352–372.
121.
WestheadP.CowlingM. (1998). Family firm research: The need for a methodological rethink. Entrepreneurship Theory and Practice, 23(1), 31–56.
122.
WisemanR. M.Gómez-MejíaL. R. (1998). A behavioral agency model of managerial risk taking. Academy of Management Review, 23(1), 133–153.
123.
WoodcockC. P.BeamishP. W.MakinoS. (1994). Ownership-based entry mode strategies and international performance. Journal of International Business Studies, 25(2), 253–273.
124.
XuD.ShenkarO. (2002). Note: Institutional distance and the multinational enterprise. Academy of Management review, 27(4), 608–618.
125.
YoungM. N.PengM. W.AhlstromD.BrutonG. D.JiangY. (2008). Corporate governance in emerging economies: A review of the principal–principal perspective. Journal of Management Studies, 45(1), 196–220.
126.
ZahraS. A. (2005). Entrepreneurial risk taking in family firms. Family Business Review, 18(1), 23–40.
127.
ZardkoohiA.HarrisonJ. S.JosefyM. A. (2017). Conflict and confluence: The multidimensionality of opportunism in principal–agent relationships. Journal of Business Ethics, 146(2), 405–417.
128.
ZellwegerT. M.AstrachanJ. H. (2008). On the emotional value of owning a firm. Family Business Review, 21(4), 347–363.
129.
ZellwegerT. M.NasonR. S.NordqvistM. (2012). From longevity of firms to transgenerational entrepreneurship of families: Introducing family entrepreneurial orientation. Family Business Review, 25(2), 136–155.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
