Title: International expansion of family firms: the moderating role of successors and external managers

Authors: Mariasole Bannò; Sandro Trento

Addresses: Department of Industrial and Mechanical Engineering, University of Brescia, Via Branze, 38, Brescia, Italy ' Department of Economics and Management, University of Trento, Via Inama, 5, Trento 38122, Italy

Abstract: Internationalisation is a key to productivity, profitability, innovation and growth, especially for family firms (FFs). This paper provides new evidence of the relationship between FFs' features and their international growth. Through socioemotional wealth, it investigates how family impacts a multinational firm's degree of internationalisation. Accordingly, it examines whether family affects the strategic decision to expand abroad through foreign direct investments. The sample comprises 361 Italian multinational companies affiliated with 5,348 foreign firms in the period 1994-2013. Given the continuous nature of the dependent variable, the degree of internationalisation, we adopt a multiple linear regression model. Family involvement in ownership is negatively associated with internationalisation, while governance has no effect. In contrast, the presence of young successors favours internationalisation. Moreover, the negative effect of family ownership is enhanced for firms with no external managers, and yet the negative effect of family ownership on internationalisation is lower for firms without successors.

Keywords: external managers; family firms; family businesses; foreign direct investment; FDI; internationalisation; multiple linear regression; ownership; socioemotional wealth; successors; international expansion; Italy; multinational corporations; MNCs; family ownership.

DOI: 10.1504/IJGSB.2016.081420

International Journal of Globalisation and Small Business, 2016 Vol.8 No.4, pp.292 - 315

Received: 04 Feb 2016
Accepted: 24 Aug 2016
Published online: 07 Jan 2017 *

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