Title: The impact of finance and governance on the internationalisation modes of family firms

Authors: Markus Dick; Christine Mitter; Birgit Feldbauer-Durstmüller; Helmut Pernsteiner

Addresses: Department of Finance, Johannes Kepler University of Linz, Altenberger Straße 69, 4040 Linz, Austria ' Salzburg University of Applied Sciences, Urstein Sued 1, 5412 Puch/Salzburg, Austria ' Institute of Management Control and Consulting, Johannes Kepler University of Linz, Altenberger Straße 69, 4040 Linz, Austria ' Department of Finance, Johannes Kepler University of Linz, Altenberger Straße 69, 4040 Linz, Austria

Abstract: By drawing on the resource-based view, this study explores the influence of a firm's finance and governance structure on its internationalisation mode using a sample of Austrian and German medium- and large-sized family firms. While medium equity levels, sophisticated financial management and external ownership foster higher levels of international activity and foreign direct investment, they do not affect a family firm's decision to export. This finding suggests that the influential power of finance and governance variables depends on the mode of internationalisation and the capital needs and other resource requirements related to it. Moreover, our results imply that certain finance and governance factors mitigate the risks associated with internationalisation, particularly higher internationalisation modes, and can therefore spur these international activities. In contrast to previous research, however, the empirical analyses do not show any influence of non-family managers.

Keywords: family firms; internationalisation modes; capital structure; external ownership; financial management; non-family managers; financial sophistication; exporting; FDI; foreign direct investment; finance; corporate governance; family businesses; resource-based view; RBV; governance structure; Austria; Germany; exporting decisions.

DOI: 10.1504/EJIM.2017.081254

European Journal of International Management, 2017 Vol.11 No.1, pp.42 - 64

Received: 02 Feb 2015
Accepted: 14 Oct 2015

Published online: 01 Jan 2017 *

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