The Internationalisation of Family Firms: the Role of the Ownership Structure and the Composition of Top Management Team
Objective: The objective of this paper is to investigate the determinants of family firm internationalisation, focusing on the roles of ownership (i.e. concentration of ownership, foreign ownership) and management (i.e. involvement of nonfamily managers, owner-CEO).
Research Design & Methods: We test our hypothesis using linear regression models and logistic regression models, based on a sample of 6,957 family firms from seven European countries (Austria, France, Germany, Hungary, Italy, Spain, UK).
Findings: The concentration of ownership within the family hinders the propensity to export, but it has no effect on export intensity and export scope. Foreign ownership contributes to firm performance and that the impact of minority foreign ownership is more pronounced than the controlling foreign ownership. The involvement of nonfamily managers enhances internationalisation, and that owner-CEO hinders internationalisation, but only in terms of global exporting.
Implications & Recommendations: The inclusion of outsiders (both in terms of ownership and management) enhances family firms’ internationalisation. This finding is particularly relevant to family business planning to expand abroad. We encourage further research investigating the relationships between different dimensions of ‘familiness’ and firm internationalisation, preferably in a multi-country context (e.g. advanced versus emerging economies).
Contribution & Value Added: The originality of this work lies in treating family firms as a heterogeneous group and investigating the impact of different dimensions of ’familiness’ (i.e. ownership structure, composition of TMTs) upon an internationalisation strategy.
family firms; top management team; ownership structure; internationalisation; export
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