Family business risk-taking and financial performance: Is it easier said than done?

Abstract

In this study we reconcile the contradictory evidence found in the risk taking-performance relationship. We study the distinction between risk taking orientation and entrepreneurial risk taking and their effects on performance and find a non-linear, U-shaped relationship when it comes to risk taking orientation. Even though we did not find evidence that pursuing risky activities has an inverted u-shaped form, our results confirm that pursuing risky activities in family firms has similar effects than in non-family firms. We also study the role of context on family business risk attitudes and actions, and performance and find moderating effects at the industry, market and country levels on the risk taking orientation-performance relationship and partially, on the entrepreneurial risk taking-performance relationship.