The myth of the stay-at-home family firm: How family-managed SMEs can overcome their internationalization limitations

Journal of International Business Studies

Volumn 50, Issue 5, 2019, Pages 758-782

  Hennart, Jean François ^a   Majocchi, Antonio ^b   Forlani, Emanuele ^c  

^a TILBURG UNIVERSITY   (Netherlands)

^b UNIVERSITY OF PAVIA   (Italy)

^c UNIVERSITY OF BOLOGNA   (Italy)

Author keywords

family firms; global niche strategies; gravity models; internationalization; internationalization theories and foreign market entry; small and medium enterprises

Indexed keywords

EID: 85027878680     PISSN: 00472506     EISSN: 14786990     Source Type: Journal    
DOI: 10.1057/s41267-017-0091-y     Document Type: Review

References (138)

1. Aguilera, R., & Crespi-Cladera, R. 2012. Firm family firms: Current debates of corporate governance in family firms. Journal of Family Business Strategy, 3(2): 66–69.
2. Anderson, R. C., & Reeb, D. M. 2003. Founding-family ownership, corporate diversification, and firm leverage. Journal of Law and Economics, 46(2): 653–684.
3. Andersson, S., Gabrielsson, J., & Wictor, I. 2004. International activities of small firms: Examining factors influencing the internationalization and export growth of small firms. Canadian Journal of Administrative Sciences, 21(1): 22–34.
4. Arregle, J. L., Duran, P., Hitt, M., & van Essen, P. 2016. Why is family firms’ internationalization unique?. A meta-analysis. Entrepreneurship Theory and Practice, doi:10.1111/etap.12246.
5. Arregle, J. L., Hitt, M., Sirmon, D. G., & Very, P. 2007. The development of organizational social capital: Attributes of family firms. Journal of Management Studies, 44(1): 73–95.
6. Arregle, J.-L., Naldi, L., Nordqvist, M., & Hitt, M. 2012. Internationalization of family-controlled firms: A study of the effects of external involvement in governance. Entrepreneurship Theory and Practice, 36(6): 1115–1143.
7. Banalieva, E., & Eddleston, K. 2011. Home regional focus and performance of family firms: The role of family vs. non-family leaders. Journal of International Business Studies, 42(8): 1060–1072.
8. Bartlett, C., & Ghoshal, S. 1998. Managing across borders: The transnational solution. Boston: Harvard Business School Press.
9. Basly, S. 2007. The internationalization of family SMEs: An organizational learning and knowledge development perspective. Baltic Journal of Management, 2(2): 154–180.
10. Bell, J. 1995. The internationalization of small computer software firms: A further challenge to the stage theories. European Journal of Marketing, 29(8): 60–75.
11. Bernard, A., & Jensen, J. 1999. Exceptional exporter performance: Cause, effect, or both? Journal of International Economics, 47(1): 1–25.
12. Berrone, P., Cruz, C., Gomez-Mejia, L. R., & Larraza-Kintana, M. 2010. Socioemotional wealth and corporate responses to institutional pressures: Do family-controlled firms pollute less?. Administrative Science Quarterly, 55(1): 82–113.
13. Bettis, R. A., Gambardella, A., Helfat, C., & Mitchell, W. 2014. Quantitative empirical analysis in strategic management. Strategic Management Journal, 35(7): 949–1101.
14. Bhaumik, S., Driffield, N., & Pal, S. 2010. Does ownership structure of emerging market firms affect their outward FDI? The case of the Indian automotive and pharmaceutical sectors. Journal of International Business Studies, 41(3): 437–450.
15. Boeker, W., & Karichalil, R. 2002. Entrepreneurial transitions: Factors influencing founder departure. Academy of Management Journal, 45(2): 818–825.
16. Boter, H., & Holmquist, C. 1996. Industry characteristics and internationalization processes in small firms. Journal of Business Venturing, 11(6): 471–487.
17. Bowen, H., & Wiersema, M. 2005. Foreign-based competition and corporate diversification strategy. Strategic Management Journal, 26(12): 1153–1171.
18. Businessweek, International edition. 2009. Handmade in Naples, Businessweek. November 15, 1999. Retrieved July 1, 2015 from http://www.businessweek.com/1999/99_46/b3655202.htm.
19. Calabrò, A., Campopiano, G., Basco, R., & Pukall, T. 2017. Governance structure and internationalization of family-controlled firms: The mediating role of international entrepreneurial orientation. European Management Journal, 35(2): 238–248.
20. Calabrò, A., Torchia, M., Pukall, T., & Mussolino, D. 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.
21. Calantone, R., & Knight, G. 2000. The critical role of product quality in the international performance of industrial firms. Industrial Marketing Management, 29(6): 493–506.
22. Carney, M. 2005. Corporate governance and competitive advantage in family-controlled firms. Entrepreneurship Theory and Practice, 29(3): 249–265.
23. Carr, C., & Bateman, S. 2009. International strategy configurations of the world’s top family firms. Management International Review, 49(6): 733–758.
24. Cerrato, D., & Piva, M. 2012. The internationalization of small and medium-sized enterprises: The effect of family management, human capital and foreign ownership. Journal of Management and Governance, 16(4): 617–644.
25. Child, J., Rodrigues, S., & Frynas, G. 2009. Psychic distance, its impact and coping modes: Interpretations of SME decision makers. Management International Review, 49(2): 199–224.
26. Chua, J., Chrisman, J., Steier, L., & Rau, S. 2012. Sources of heterogeneity in family firms: An introduction. Entrepreneurship Theory and Practice, 36(6): 1103–1253.
27. Claver, E., Rienda, L., & Quer, D. 2009. Family firm’s international commitment: The influence of family-related factors. Family Business Review, 22(2): 125–135.
28. Coleman, J. 1990. Foundations of Social Theory. Cambridge, MA: Harvard University Press.
29. Colli, A. 2011. Business history in family business studies: From neglect to cooperation? Journal of Family Business Management, 1(1), 15–25.
30. Colli, A., Garcia-Canal, E., & Guillen, M. 2013. Family character and international entrepreneurship: A historical comparison of Italian and Spanish ‘new multinationals’. Business History, 55(1): 119–138.
31. Couturier, J., & Sola, D. 2014. Babolat: Innovation and Heritage in Tennis. Case Center case 314-080-1. Berlin: ESCP Europe.
32. Cromie, S., Stephenson, B., & Montieth, D. 1995. The management of family firms: An empirical investigation. International Small Business Journal, 13(4): 11–34.
33. D’Angelo, A., Majocchi, A., & Buck, T. 2016. External managers, family ownership and the scope of SME internationalization. Journal of World Business, 51(4): 534–547.
34. Daily, C., & Dollinger, M. 1993. Alternative methodologies for identifying family versus nonfamily-managed businesses. Journal of Small Business Management, 31(2): 79–90.
35. Dalgic, T., & Leeuw, M. 1994. Niche marketing revisited: Concept, applications, and some European cases. European Journal of Marketing, 20(1): 39–55.
36. Davis, P., & Harveston, P. 1999. In the founder’s shadow: Conflict in the family firm. Family Business Review, 12(4): 311–323.
37. De Massis, A., Kotlar, J., Mazzola, P., Minola, T., & Sciasca, S. 2016. Conflicting selves: Family owners’ multiple goals and self-control agency problems in private firms. Entrepreneurship Theory and Practice, doi:10.1111/etap.1225.7.
38. Deephouse, D., & Jaskiewicz, P. 2013. Do family firms have better reputations than non-family firms? An integration of socioemotional wealth and social identity theories. Journal of Management Studies, 50(3): 337–360.
39. Demsetz, H., & Lehn, K. 1985. The structure of corporate ownership: Causes and consequences. Journal of Political Economy, 93(6): 1155–1171.
40. Déniz-Déniz, M., & Cabrera-Suarez, K. 2005. Corporate social responsibility and family business in Spain. Journal of Business Ethics, 56(1): 27–41.
41. Desmet, P. 2015. Pricing policy for an innovation: Babolat play pure drive, the first connected racquet. Case Center case 515-082-1. Cergy-Pontoise: Essec Business School.
42. Dow, D., & Ferencikova, S. 2010. More than just national cultural distance: Testing new distance scales on FDI in Slovakia. International Business Review, 19(1): 46–58.
43. Dow, D., & Karunaratna, A. 2006. Developing a multidimensional instrument to measure psychic distance stimuli. Journal of International Business Studies, 37(5): 578–602.
44. Dyer, W. 1988. Culture and continuity in family firms. Family Business Review, 1(1): 18–24.
45. Dyer, W. 2006. Examining the ‘family effect’ of firm performance. Family Business Review, 19(4): 253–273.
46. Echols, A., & Tsai, W. 2005. Niche and performance: The moderating role of network embeddedness. Strategic Management Journal, 26(3): 219–238.
47. Evers, N. 2010. Factors influencing the internationalization of new ventures in the Irish aquaculture industry: An exploratory study. Journal of International Entrepreneurship, 8(4): 392–416.
48. Falay, Z., Salimaki, M., Ainamo, A., & Gabrielsson, M. 2007. Design-intensive born globals: A multiple case study of marketing management. Journal of Marketing Management, 23(9–10): 877–899.
49. Fan, T., & Phan, P. 2013. How product attributes influence internationalization: A framework of domain and culture specificity. Management International Review, 55(1): 53–76.
50. Feldman, E. R., Amit, R., & Villalonga, B. 2016. Corporate divestitures and family control. Strategic Management Journal, 37(3): 429–446.
51. Fernández, Z., & Nieto, M. 2005. Internationalization strategy of small and medium-sized family businesses: Some influential factors. Family Business Review, 18(1): 77–89.
52. Fernández, Z., & Nieto, M. 2006. Impact of ownership on the international involvement of SMEs. Journal of International Business Studies, 37(3): 340–351.
53. Fernández, Z., & Nieto, M. 2013. Internationalization of family firms. In L. Melin, M. Nordqvist, & P. Sharma (Eds.), The Sage Handbook of Family Business. Los Angeles: Sage.
54. Filatotchev, I., Dyomina, N., Wright, M., & Buck, T. 2001. Effects of post-privatization governance and strategies on export intensity in the former Soviet Union. Journal of International Business Studies, 32(2): 853–871.
55. Fink, M., & Kraus, S. 2007. Mutual trust as a key to internationalization of SMEs. Management Research News, 30(9): 674–688.
56. Fisher, R. J. 1991. Durable differentiation strategies for services. Journal of Services Marketing, 5(1): 19–28.
57. Forbes. 2013. Illy’s espresso revolution: A luxury business model and the search for the perfect coffee, December 10, 2013. Retrieved November 10, 2015 from http://www.forbes.com/sites/afontevecchia/2013/12/10/illys-espresso-revolution-a-luxury-business-model-and-the-search-for-the-perfect-coffee/.
58. Galbraith, C. 2003. Divorce and the financial performance of small family businesses: An exploratory study. Journal of Small Business Management, 41(3): 296–309.
59. Gallo, M., & Sveen, J. 1991. Internationalizing the family business: Facilitating and restraining factors. Family Business Review, 4(2): 181–190.
60. Gallo, M., Tapies, J., & Cappuyns, K. 2004. Comparison of family and non-family business: Financial logic and personal preferences. Family Business Review, 17(4): 303–318.
61. German Design Council. 2014. Gerd Bulthaup. Liberating space. Retrieved July 2, 2015 from http://www.german-design-council.de/fileadmin/Bilder/German_Design_Award/German_Design_Award_2014/Pressetexte/GerdBulthaup_LiberatingSpace.pdf.
62. Gersick, K., Davis, J., Hampton, M., & Lansberg, I. 1997. Generation to generation: Life cycles of the family business. Boston: Harvard Business School Press.
63. Golovko, E., & Valentini, G. 2011. Exploring the complementarity between innovation and export for SMEs’ growth. Journal of International Business Studies, 42(3): 362–380.
64. Golovko, E., & Valentini, G. 2014. Selective learning-by-exporting: Firm size and product versus process innovation. Global Strategy Journal, 4(3): 161–180.
65. Gomez-Mejia, L. R., Cruz, C., Berrone, P., & de Castro, J. 2011. The bind that ties: Socioemotional wealth preservation in family firms. Academy of Management Annals, 5(1), 653–707.
66. Gomez-Mejia, L., Makri, M., & Larraza-Kintana, M. 2010. Diversification decisions in family-controlled firms. Journal of Management Studies, 47(2): 223–252.
67. Graves, C., & Thomas, J. 2006. Internationalization of Australian family firms: A managerial capabilities perspective. Family Business Review, 19(3): 207–224.
68. Head, K., & Mayer, T. 2014. Gravity equations: Workhorse, toolkit, and cookbook. In G. Gopinath, E. Helpman, & K. Rogoff (Eds.), Handbook of international economics, vol. 4. Amsterdam: Elsevier, pp. 131–195.
69. Hennart, J. F. 1982. A theory of multinational enterprise. Ann Arbor: University of Michigan Press.
70. Hennart, J. F. 2010. Transaction cost theory and international business. Journal of Retailing, 86(3): 257–269.
71. Hennart, J. F. 2011. A theoretical assessment of the empirical literature on the impact of multinationality on performance. Global Strategy Journal, 1(1–2): 135–151.
72. Hennart, J. F. 2014. The accidental internationalists: A theory of born globals. Entrepreneurship Theory and Practice, 38(1): 117–135.
73. Hofstede, G. 2001. Culture’s consequences. Thousand Oaks, CA: Sage.
74. Hsu, P., Huang, S., Massa, M., & Zhang, H. 2014. The new lyrics of the old folks: The role of family ownership in corporate innovation, http://ssrn.com/abstracts=2487083.
75. IMF. 2012. World economic outlook database, April. Washington, DC: International Monetary Fund.
76. Jensen, M., & Meckling, W. 1976. Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.
77. Johanson, J., & Vahlne, J. E. 1977. Internationalization process of firm—A model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8(1): 23–32.
78. Johanson, J., & Vahlne, J. E. 2009. The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies, 40(3): 1411–1431.
79. Johanson, J., & Wiedersheim-Paul, F. 1975. The internationalization of the firm: Four Swedish cases. Journal of Management Studies, 12(3): 305–322.
80. Kano, L., & Verbeke, A. 2015. The three faces of bounded reliability: Alfred Chandler and the micro-foundations of management theory. California Management Review, 58(1): 97–122.
81. Kano, L., & Verbeke, A. forthcoming. Family firm internationalization: Heritage assets and the impact of the bifurcation bias. Global Strategy Journal.
82. Kets de Vries, M. 1996. Family business: Human dilemmas in the family firm. London: International Thomson Business Press.
83. Kogut, B., & Singh, H. 1988. The effect of national culture on the choice of entry mode. Journal of International Business Studies, 19(3): 411–432.
84. Koiranen, M. 2002. Over 100 years of age but still entrepreneurially active in business: Exploring the values and family characteristics of old Finnish family firms. Family Business Review, 15(3): 175–187.
85. Kontinen, T., & Ojala, A. 2010. The internationalization of family business: A review of extant research. Journal of Family Business Strategy, 1(2): 97–107.
86. Kotler, P. 2003. Marketing management (11th ed.). Upper Saddle River, NJ: Prentice Hall.
87. La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. 1999. Corporate ownership around the world. Journal of Finance, 54(2): 471–517.
88. Le Breton-Miller, I., & Miller, D. 2006. Why do some family businesses out-compete? Governance, long-term orientation, and sustainable capability. Entrepreneurship Theory and Practice, 30(6): 731–746.
89. Levitt, T. 1983. The globalization of markets. Harvard Business Review, 61: 92–102.
90. Liang, X., Wang, L., & Cui, Z. 2014. Chinese private firms and internationalization: Effects of family involvement in management and family ownership. Family Business Review, 27(2): 126–141.
91. Majocchi, A., Bacchiocchi, E., & Mayrhofer, U. 2005. Firm size, business experience and export intensity in SMEs: A longitudinal approach to complex relationships. International Business Review, 14(6): 719–738.
92. Majocchi, A., & Strange, R. 2012. International diversification: The impact of ownership structure, the market for corporate control and board independence. Management International Review, 52(6): 879–900.
93. Marinova, S., & Marinov, M. 2017. Inducing the internationalization of family manufacturing firms in a transition context. European Business Review, 29(2): 181–204.
94. Mascarenhas, B. 1999. The strategies of small and large international specialists. Journal of World Business, 34(3): 252–266.
95. Mayer, T., & Zignago, S. 2011. Notes on CEPII’s Distances Measures: The GeoDist Database. CEPII Working Paper 2011-25. Paris: CEPII.
96. Miller, D., & Le Breton-Miller, I. 2003. Challenge versus advantage in family business. Strategic Organization, 1(1): 127–134.
97. Miller, D., & Le Breton-Miller, I. 2005. Managing for the long run: Lessons in competitive advantage from great family businesses. Boston, MA: Harvard Business School Press.
98. Miller, D., Le Breton-Miller, I., & Lester, R. H. 2010. Family ownership and acquisition behavior in publicly-traded companies. Strategic Management Journal, 31(2): 201–223.
99. Muñoz-Bullon, F., & Sanchez-Bueno, M. 2012. So family ties shape the performance consequences of diversification? Evidence from the European Union. Journal of World Business, 47(3): 469–477.
100. Nahapiet, J., & Ghoshal, S. 1998. Social capital, intellectual capital, and the organizational advantage. The Academy of Management Review, 23(2): 242–266.
101. Pellegrini, E., & Scandura, T. 2006. Leader-member exchange (LMX), paternalism and delegation in the Turkish business culture: An empirical investigation. Journal of International Business Studies, 37(2): 264–279.
102. Pollak, R. 1985. A transaction cost approach to families and households. Journal of Economic Literature, 23(2): 581–608.
103. Pukall, T. J., & Calabrò, A. 2014. The internationalization of family firms: A critical review and integrative model. Family Business Review, 27(2): 103–125.
104. Reeb, D., Sakakibara, M., & Mahmood, I. P. 2012. Endogeneity in international business research. Journal of International Business Studies, 43(3): 211–218.
105. Richman, B. 2002. Community Enforcement of Informal Contracts: Jewish Diamond Merchants in New York. Harvard Law School John M. Olin Center for Law and Economics Discussion Paper Series No. 384.
106. Rumelt, R. 1984. Towards a strategic theory of the firm. In R. Lamb (Ed.), Competitive Strategic Management. Englewood Cliffs, NJ: Prentice Hall, pp. 556–570.
107. Sanchez-Bueno, M., & Usero, B. 2014. How may the nature of family firms explain the decisions concerning international diversification? Journal of Business Research, 67(7): 1311–1320.
108. Sanders, W., & Carpenter, M. 1998. Internationalization and firm governance: The roles of CEO compensation, top team compensation, top team composition, and board structure. Academy of Management Journal, 41(2): 158–178.
109. Scholes, L., Mustafa, S., & Chen, S. 2015. Internationalization of small family firms: The influence of family from a socioemotional wealth perspective. Thunderbird International Business Review, 58(2): 131–146.
110. Schulze, W., Lubatkin, M., Dino, R., & Buchholtz, A. 2001. Agency relationships in family firms: Theory and evidence. Organization Science, 12(2): 99–116.
111. Sciascia, S., & Mazzola, P. 2008. Family involvement in ownership and management: Exploring nonlinear effects on performance. Family Business Review, 21(4): 331–345.
112. Sciascia, S., Mazzola, P., Astrachan, J., & Pieper, T. 2012. The role of family ownership in international entrepreneurship: Exploring nonlinear effects. Small Business Economics, 38(1): 15–31.
113. Segaro, E., Larimo, J., & Jones, M. 2014. Internationalisation of family small and medium sized enterprises: The role of stewardship orientation, family commitment culture and top management team. International Business Review, 23(2), 381–395.
114. Semadeni, M., Withers, M. C., & Certo, S. T. 2014. The perils of endogeneity and instrumental variables in strategy research: Understanding through simulations. Strategic Management Journal, 35(7): 1070–1079.
115. Shani, D., & Chalasani, S. 1992. Exploiting niches using relationship marketing. The Journal of Services Marketing, 6(4): 43–52.
116. Simon, H. 2009. Hidden champions of the 21st century. Berlin: Springer.
117. Simon, H. 2014. The global success of midsized companies. The German Times for Europe, May 30, 2014. Retrieved June 30, 2015 from http://www.german-times.com/index.php?option=com_content&task=view&id=43501&Itemid=244.
118. Stock, J., & Yogo, M. 2005. Testing for weak instruments in linear IV regression. In D. Andrews (Ed.), Identification and Inference for Econometric Models. New York: Cambridge University Press, pp. 80–108.
119. Swaminathan, A. 2001. Resource partitioning and the evolution of specialist organizations: The role of location and identity in US wine. Academy of Management Journal, 44(6): 1169–1185.
120. Thomas, J., & Graves, C. 2005. Internationalisation of the family firm: The contribution of an entrepreneurial orientation. Journal of Business and Entrepreneurship, 17(2): 91–113.
121. Tinbergen, J. 1962. Shaping the World Economy. New York: Twentieth Century Fund.
122. Toften, K., & Hammervoll, T. 2013. Niche marketing research: Status and challenges. Marketing Intelligence and Planning, 31(3): 272–285.
123. Venohr, B., & Meyer, K. 2007. The German miracle keeps running: How Germany’s “hidden champions” stay ahead in the global economy. Available at SSRN, http://ssrn.com/abstract=991964 or doi:10.2139/ssrn.991964.
124. Verbeke, A., & Forootan, M. 2012. How good are multinationality–performance (M–P) empirical studies? Global Strategy Journal, 2(4): 332–344.
125. Verbeke, A., & Kano, L. 2010. The transaction cost economics theory of the family firm: Family-based human asset specificity and the bifurcation bias. Entrepreneurship Theory and Practice, 34(6): 1173–1182.
126. Verbeke, A., & Kano, L. 2012. Transaction cost economics (TCE) and the family firm. Entrepreneurship Theory and Practice, 36(6): 1183–1205.
127. Verwaal, E., & Donkers, B. 2002. Firm size and export intensity: Solving an empirical puzzle. Journal of International Business Studies, 33(3): 603–613.
128. Villalonga, B., & Amit, R. 2010. Family control of firms and industries. Financial Management, 39(3): 863–904.
129. Von Hippel, E. 1986. Lead users: A source of novel product concepts. Management Science, 32(7): 791–805.
130. Ward, P., Bickford, D., & Leong, G. K. 1996. Configurations of manufacturing strategy, business strategy, environment and structure. Journal of Management, 22(4), 597–626.
131. Wiersema, M., & Bowen, H. 2009. The use of limited dependent variable techniques in strategy research: Issues and methods. Strategic Management Journal, 30(6), 679–692.
132. Williamson, O. 1985. The economic institutions of capitalism: Firms, markets, relational contracting. New York: Free Press.
133. Wine Enthusiast. 2000. Interview with Marchese Piero Antinori, Wine Enthusiast Magazine, April. Retrieved October, 30, 2015 from http://www.winemag.com/April-2000/Exclusive-Interview-with-Marchese-Piero-Antinori/.
134. World Value Survey Association. 2016. World Value Survey Wave 6 (2010–2014). Stockholm: World Value Survey Association. http://worldvaluessurvey.org/WVSDocumentationWV6.jsp. Accessed May 1, 2017.
135. Wright, M., Chrisman, J., Chua, J., & Steier, L. 2014. Family enterprise and context. Entrepreneurship Theory and Practice, 38(6): 1247–1260.
136. Zahra, S. 2003. International expansion of US manufacturing family businesses: The effect of ownership and involvement. Journal of Business Venturing, 18(4): 495–512.
137. Zucchella, A., & Palamara, G. 2006. Niche strategy and export performance. Advances in International Marketing, 17(1): 63–87.
138. Zwinkels, R., & Beugelsdijk, S. 2010. Gravity equations: Workhorse or Trojan horse in explaining trade and FDI patterns across time and space? International Business Review, 19(1): 102–111.