CEO risk preferences in family firms: Combining socioemotional wealth and gender identity perspectives

Abstract

Challenging the established notion that women at the top are consistently risk averse, this study combines insights from social identity and socioemotional wealth (SEW) perspectives to propose a novel view of risk preferences by women and men CEOs in family businesses. It reframes risk preferences as behavioral responses by gender and family (managerial) role expectations relative to social aspirations. An empirical test of Italian firms provides support for the hypothesized effects. For firms above social aspirations, women family CEOs take more risk as performance declines than their men family counterparts; this gap in risk preferences attenuates for men/women nonfamily CEOs. For firms below social aspirations, these effects are reversed. This study contributes to research on gender identity and risk-taking in family firms by showing that women and men do not always behave according to gender stereotypes. Rather, due to malleability of gender identity, they enact differing risk behaviors across contexts. In addition, it advances SEW theory by unpacking the effects of distinct SEW dimensions on firm risk by gender identity.