Internationalization of Family-Controlled Firms: A Study of the Effects of External Involvement in Governance

Entrepreneurship: Theory and Practice

Volumn 36, Issue 6, 2012, Pages 1115-1143

  Arregle, Jean Luc ^a   Naldi, Lucia ^b   Nordqvist, Mattias ^b   Hitt, Michael A ^c  

^a EMLYON BUSINESS SCHOOL   (France)

^b JÖNKÖPING INTERNATIONAL BUSINESS SCHOOL   (Sweden)

^c TEXAS A AND M UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84876179793     PISSN: 10422587     EISSN: 15406520     Source Type: Journal    
DOI: 10.1111/j.1540-6520.2012.00541.x     Document Type: Article

References (98)

1. Aldrich, H.E. (1979). Organizations and environments. Englewood Cliffs, NJ: Prentice-Hall.
2. Anderson, R.C. & Reeb, D.M. (2004). Board composition: Balancing family influence in S&P 500 firms. Administrative Science Quarterly, 49, 209-237.
3. Arregle, J.L., Hitt, M.A., Sirmon, D.G., & Very, P. (2007). The development of organizational social capital: Attributes of family firms. Journal of Management Studies, 44, 73-95.
4. Autio, E., Sapienza, H.J., & Almeida, J.G. (2000). Effects of age at entry, knowledge intensity, and imitability on international growth. Academy of Management Journal, 43(5), 909-924.
5. Bammens, Y., Voordeckers, W., & Van Gils, A. (2011). Board of directors in family businesses: A literature review and research agenda. International Journal of Management Reviews, 13, 134-152.
6. Banalieva, E.R. & Eddleston, K.A. (2011). Home-region focus and performance of family firms: The role of family vs. non-family leaders. Journal of International Business Studies, 42, 1060-1072.
7. Berk, R.A. (1983). An introduction to sample selection bias in sociological data. American Sociological Review, 48(3), 386-398.
8. Boeker, W. & Goodstein, J. (1991). Organizational performance and adaptation: Effects of environment and performance on changes in board composition. Academy of Management Journal, 34(4), 805-826.
9. Bourdieu, P. (1994). Raisons pratiques, Essais. Paris, France: Editions du Seuil.
10. Boyd, B. (1990). Corporate linkages and organizational environment: A test of the resource dependence model. Strategic Management Journal, 11(6), 419-430.
11. Brunninge, O., Nordqvist, M., & Wiklund, J. (2007). Corporate governance and strategic change in SMEs: The effects of ownership, board structure and top management teams. Small Business Economics, 29(3), 295-308.
12. Brush, C.G., Edelman, L.F., & Manolova, T.S. (2002). The impact of resources on small firm internationalization. Journal of Small Business Strategy, 13(1), 1-17.
13. Buckley, P.J. (1989). Foreign investment by small-and-medium-sized enterprises: The theoretical background. Small Business Economics, 1, 89-100.
14. Carney, M. (2005). Corporate governance and competitive advantage in family-controlled firms. Entrepreneurship Theory and Practice, 29(3), 249-265.
15. Chrisman, J.J., Chua, J.H., & Sharma, P. (2005). Trends and directions in the development of a strategic management theory of the family firm. Entrepreneurship Theory and Practice, 29, 555-575.
16. Chua, J.H., Chrisman, J.J., & Sharma, P. (1999). Defining the family business by behavior. Entrepreneurship Theory and Practice, 23, 19-39.
17. Connelly, B.L., Hoskisson, R., Tihanyi, L., & Certo, S.T. (2010). Ownership as a form of corporate governance. Journal of Management Studies, 47(8), 1561-1589.
18. Dalton, D. & Kesner, I. (1985). Organizational performance as an antecedent of inside/outside chief executive succession: An empirical assessment. Academy of Management Journal, 28, 749-762.
19. Davis, J.H., Schoorman, F.D., & Donaldson, L. (1997). Toward a stewardship theory of management. Academy of Management Review, 22, 20-47.
20. Dess, G.G. & Beard, D.W. (1984). Dimensions of organizational task environments. Administrative Science Quarterly, 29(1), 52-73.
21. Fama, E.F. & Jensen, M.C. (1983). Separation of ownership and control. Journal of Law and Economics, 26, 301-326.
22. Fernández, Z. & Nieto, M.J. (2005). Internationalization strategy of small and medium-sized family businesses: Some influential factors. Family Business Review, 18(1), 77-89.
23. Fernández, Z. & Nieto, M.J. (2006). Impact of ownership on the international involvement of family SMEs. Journal of International Business Studies, 37(3), 340-351.
24. Fernhaber, S.A., Gilbert, B.A., & McDougall, P.P. (2008). International entrepreneurship and geographic location: An empirical examination of new venture internationalization. Journal of International Business Studies, 39(2), 267-290.
25. Fiegenbaum, A. & Thomas, H. (1988). Attitudes toward risk and the risk-return paradox: Prospect theory explanations. Academy of management Journal, 31, 85-106.
26. Finkelstein, S. & Hambrick, D.C. (1989). Chief executive compensation: A study of the intersection of markets and political processes. Strategic Management Journal, 10(2), 121-134.
27. Fortes, M. (1969). Kinship and the axiom of amity. In M. Fortes (Ed.), Kinship and the social order (pp. 219-249). Chicago, IL: Aldine.
28. Gallo, M. & García-Pont, C. (1996). Important factors in family business internationalization. Family Business Review, 9(1), 45-59.
29. George, G., Wiklund, J., & Zahra, S.A. (2005). Ownership and the internationalization of small firms. Journal of Management, 31(2), 210-233.
30. Geringer, J.M., Beamish, P.W., & daCosta, R.C. (1989). Diversification strategy and internationalization: Implications for MNE performance. Strategic Management Journal, 10(2), 109-119.
31. Goffee, R. & Scase, R. (1985). Proprietorial control in family firms: Some functions of "quasi-organic" management system. Journal of Management Studies, 22, 53-68.
32. Gomez-Mejia, L.R., Makri, M., & Larraza-Kintana, M. (2010). Diversification decisions in family controlled firms. Journal of Management Studies, 47(2), 223-252.
33. Gomez-Mejia, L.R., Nunez-Nickel, M., & Gutierrez, I. (2001). The role of family ties in agency contracts. Academy of Management Journal, 44(1), 81-95.
34. Graves, C. & Thomas, J. (2006). Internationalization of Australian family business: A managerial capabilities perspective. Family Business Review, 19(3), 207-224.
35. Heckman, J.J. (1979). Sample selection bias as a specification error. Econometrica, 47(1), 153-161.
36. Helmich, D. & Brown, W. (1982). Successor type and organizational change in the corporate enterprise. Administrative Science Quarterly, 17, 371-381.
37. Hillman, A.J., Cannella, A.J., & Paetzold, R. (2000). The resource dependence role of corporate directors: Strategic adaptation of board composition in response to environmental change. Journal of Management Studies, 37(2), 236-255.
38. Hillman, A.J., Withers, M.C., & Collins, B.J. (2009). Resource dependence theory: A review. Journal of Management, 35, 1404-1427.
39. Hitt, M.A., Bierman, L., Uhlenbruck, K., & Shimizu, K. (2006). The importance of resources in the internationalization of professional service firms: The good, the bad, and the ugly. Academy of Management Journal, 49(6), 1137-1157.
40. Hitt, M.A., Hoskisson, R.E., & Kim, H. (1997). International diversification: Effects on innovation and firm performance in product diversified firms. Academy of Management Journal, 40, 767-798.
41. Holmes, R.M., Miller, T., Hitt, M.A., & Salmador, M.P. (2012). The interrelationships among informal institutions, formal institutions, and inward foreign direct investment. Journal of Management, doi:10.1177/0149206310393503.
42. James, H.S. (1999). Owner as manager, extended horizons and the family firm. International Journal of the Economics of Business, 6, 41-55.
43. Johannisson, B. & Huse, M. (2000). Recruiting outside board members in the small family business: An ideological challenge. Entrepreneurship and Regional Development, 12, 333-378.
44. Johanson, J. & Vahlne, J.E. (1977). The internationalization process of the firm: A model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8(1), 23-32.
45. Jones, C.D., Makri, M., & Gomez-Mejia, L.R. (2008). Affiliate directors and perceived risk bearing in publicly traded, family-controlled firms: The case of diversification. Entrepreneurship Theory and Practice, 32(6), 1007-1026.
46. Julien, P.-A. & Ramangalahy, C. (2003). Competitive strategy and performance of exporting SMEs: An empirical investigation of the impact of their export information search and competencies. Entrepreneurship Theory and Practice, 27(3), 227-245.
47. Kahneman, D. & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47, 263-291.
48. Kim, H., Kim, H., & Lee, P.M. (2008). Ownership structure and the relationship between financial slack and R&D investments: Evidence from Korean firms. Organization Science, 19(3), 404-418.
49. Knight, G.A. & Liesch, P.W. (2002). Information internalisation in internationalising the firm. Journal of Business Research, 55(12), 981-995.
50. Kontinen, T. & Ojala, A. (2010). The internationalization of family businesses: A review of extant research. Journal of Family Business Strategy, 1(2), 97-107.
51. Larraza-Kintana, M., Wiseman, R.M., Gomez-Mejia, L.R., & Welbourne, T.M. (2007). Disentangling compensation and employment risks using the behavioral agency model. Strategic Management Journal, 28, 1001-1019.
52. Li, J. & Hambrick, D.C. (2005). Factional groups: A new vantage on demographic faultlines, conflict, and disintegration in work teams. Academy of Management Journal, 48, 794-813.
53. Long, J.S. & Freese, J. (2006). Regression models for categorical dependent variables using Stata (2nd ed.). College Station, TX: Stata Press.
54. Manolova, T.S., Carter, N.M., Manev, I.M., & Gyoshev, B.S. (2007). The differential effect of men and women entrepreneurs' human capital and networking on growth expectancies in Bulgaria. Entrepreneurship Theory and Practice, 31(3), 407-426.
55. Melin, L. (1992). Internationalization as a strategy process. Strategic Management Journal, 13, 99-118.
56. Melin, L. & Nordqvist, M. (2007). The reflexive dynamics of institutionalization: The case of the family business. Strategic Organization, 5(4), 321-333.
57. Miller, D. (1983). The correlates of entrepreneurship in three types of firms. Management Science, 29(7), 770-791.
58. Miller, D. & Friesen, P.H. (1978). Archetypes of strategy formulation. Management Science, 24, 921-933.
59. Miller, D. & Friesen, P.H. (1982). Innovation in conservative and entrepreneurial firms: Two models of strategic momentum. Strategic Management Journal, 3(1), 1-25.
60. Miller, D., LeBreton-Miller, I., & Scholnick, B. (2008). Stewardship vs. stagnation: An empirical comparison of small family and non-family businesses. Journal of Management Studies, 45(1), 51-78.
61. Minichilli, A., Corbetta, G., & MacMillan, I.C. (2010). Top management team in family controlled companies: Familiness, faultiness, and the impact on financial performance. Journal of Management Studies, 47(2), 205-222.
62. Mustakallio, M., Autio, E., & Zahra, S.A. (2002). Relational and contractual governance in family firms: Effects on strategic decision making. Family Business Review, 15, 205-222.
63. Nordqvist, M. (2005). Understanding the role of ownership in strategizing: A study of family firms. PhD dissertation, Jönköping International Business School, Jönköping, Sweden.
64. OECD. (2000). Small and medium-sized enterprises: Local strength, global reach. In OECD (Ed.), OECD Policy Brief, June 1-8. Paris: OECD.
65. Okoroafo, S.C. (1999). Internationalization of family businesses: Evidence from Northwest Ohio, U.S.A. Family Business Review, 12(2), 147-158.
66. Papke, L.E. & Wooldridge, J.M. (1996). Econometric methods for fractional response variables with an application to 401(k) plan participation rates. Journal of Applied Econometrics, 11(6), 619-632.
67. Pedersen, T. & Welch, L.S. (2002). Foreign operation mode combinations and internationalization. Journal of Business Research, 55(2), 157-162.
68. Peng, M.W. (2004). Outside directors and firm performance during institutional transitions. Strategic Management Journal, 25(5), 453-471.
69. Pfeffer, J. (1972). Size and composition of corporate board of directors: The organization and its environment. Administrative Science Quarterly, 17(2), 218-228.
70. Pfeffer, J. & Salancik, G.R. (2003). The external control of organizations: A resource dependence perspective. Stanford, CA: Stanford Business Books.
71. Podsakoff, P.M., MacKenzie, S.B., Lee, J.Y., & Podsakoff, N.P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88, 879-903.
72. Preisendorfer, P. & Voss, T. (1990). Organizational mortality of small firms: The effects of entrepreneurial age and human capital. Organization Studies, 11(1), 107-129.
73. Rediker, K.J. & Seth, A. (1995). Board of directors and substitution effects of alternative governance mechanisms. Strategic Management Journal, 16(2), 85-99.
74. Rugman, A.M. & Sukpanich, N. (2006). Firm-specific advantages intra-regional sales and performance of multinational enterprises. International Trade Journal, 20(3), 355-382.
75. Rugman, A.M. & Verbeke, A. (2005). Towards a theory of regional multinationals: A transaction cost economics theory. Management International Review, 45, 5-17.
76. Sanders, W.M.G. & Carpenters, M.A. (1998). Internationalization and firm governance: The roles of CEO compensation, top team composition, and board structure. Academy of Management Journal, 41(2), 158-178.
77. Schulze, W.S., Lubatkin, M.H., Dino, R.N., & Buchholtz, A.K. (2001). Agency relationships in family firms: Theory and evidence. Organization Science, 12(2), 99-116.
78. Sciascia, S., Mazzola, P., Astrachan, J.H., & Pieper, T.M. (2012). The role of family ownership in international entrepreneurship: Exploring nonlinear effects. Small Business Economics, 38(1), 15-31.
79. Shaver, J.M. (2011). The benefits of geographic sales diversification: How exporting facilitates capital investment. Strategic Management Journal, 32, 1046-1060.
80. Shrader, R. (2001). Collaboration and performance in foreign markets: The case of young high-technology manufacturing firms. Academy of Management Journal, 44(1), 45-60.
81. Sirmon, D., Hitt, M., Arregle, J.L., & Tochman Campbell, J. (2010). The dynamic interplay of capability strengths and weaknesses: Investigating the bases of temporary competitive advantage. Strategic Management Journal, 13, 1386-1409.
82. Sirmon, D.G., Arregle, J.L., Hitt, M.A., & Webb, J.W. (2008). The role of family influence in firms' strategic responses to threat of imitation. Entrepreneurship Theory and Practice, 36(6), 979-998.
83. Sirmon, D.G. & Hitt, M.A. (2003). Managing resources: Linking unique resources, management, and wealth creation in family firms. Entrepreneurship Theory and Practice, 27(4), 339-358.
84. Skaggs, B.C. & Youndt, M. (2004). Strategic positioning, human capital, and performance in service organizations: A customer interaction approach. Strategic Management Journal, 25(1), 85-99.
85. Stewart, A. (2003). Help one another, use one another: Toward an anthropology of family business. Entrepreneurship Theory and Practice, 27(4), 383-396.
86. Sullivan, D. (1994). Measuring the degree of internationalization of a firm. Journal of International Business Studies, 25(2), 325-342.
87. Tallman, S. & Li, J. (1996). Effects of international diversity and product diversity on the performance of multinational firms. Academy of Management Journal, 39(1), 179-196.
88. Tihany, L., Hoskisson, R.E., Johnson, R.A., & Hitt, M.A. (2003). Institutional ownership differences and international diversification: The effects of board of directors and technological opportunity. Academy of Management Journal, 46, 195-211.
89. van der Klaauw, B. & Koning, R.H. (2003). Testing the normality assumption in the sample selection model with an application to travel demand. Journal of Business and Economic Statistics, 21(1), 31-42.
90. Villalonga, B. & Amit, R. (2006). How do family ownership, control and management affect firm value? Journal of Financial Economics, 80, 385-417.
91. Wagner, J. (2001). A note on the firm size-export relationship. Small Business Economics, 17(4), 229-237.
92. Westhead, P. & Howorth, C. (2007). Types of private family firms: An exploratory conceptual and empirical analysis. Entrepreneurship and Regional Development, 19(5), 405-431.
93. Wiklund, J. & Shepherd, D. (2003). Knowledge-based resources, entrepreneurial orientation, and the performance of small and medium-sized businesses. Strategic Management Journal, 24(13), 1307-1314.
94. Wooldridge, J.M. (2002). Econometric analysis of cross section and panel data. Cambridge, MA: MIT Press.
95. Yusof, S.M. & Aspinwall, E.M. (2000). Critical success factors in small and medium enterprises: Survey results. Total Quality Management, 11(4-6), 448-462.
96. Zaheer, S. & Mosakowski, E. (1997). The dynamics of the liability of foreignness: A global study of survival in financial services. Strategic Management Journal, 18(6), 439-464.
97. Zahra, S.A. (2003). International expansion of U.S. manufacturing family businesses: The effect of ownership and involvement. Journal of Business Venturing, 18(4), 495-512.
98. Zellweger, T.M., Nason, R.S., Nordqvist, M., & Brush, C.G. (2011). Why do family firms strive for nonfinancial goals? An organizational identity perspective. Entrepreneurship Theory and Practice, doi: 10.1111/j.1540-6520.2011.00466.x.