Role of socioemotional wealth (SEW) in the internationalisation of family firms

Abstract

PurposeFamily firms' desire to preserve and uphold socioemotional wealth (SEW) makes their internationalisation a complex phenomenon. Despite the significance of SEW in guiding family firms' internationalisation decisions, the literature in the underlying research stream is still scant and inconclusive. Thus, the purpose of the study is to gain preliminary insights about various dimensions of SEW and its impact on family firms' degree of internationalisation.Design/methodology/approachThe study employs the multi-case study research design. The multidimensional SEW scale developed by Berrone et al. (2012) is used to calculate the SEW scores for four prominent Indian family businesses through the content analysis of Chairman's Statements for a period of 13 years (2007–08 to 2019–20). Further, the study examines the relationship between SEW and family firms' degree of internationalisation through two non-parametric tests: Somers' D and Kendall-Theil regression.FindingsThe results reveal the prevalence of various dimensions of SEW in family businesses. They also indicate that different FIBER dimensions are prioritised differently in family businesses. Finally, the authors observe that there exists a negative relationship between SEW and internationalisation of family businesses, indicating that SEW hinders the internationalisation of family firms.Research limitations/implicationsThe study lends to the readers, the understanding that SEW plays a significant role in the internationalisation of family firms; thus, some modification might be needed in the existing international business theories in order to explain the role of peculiar family characteristics in the internationalisation decisions of family firms. Further, since SEW hinders the internationalisation of family firms, it raises a question for researchers and family business leaders: Do family firms need to work on their socioemotional ties to avoid making suboptimal decisions?Originality/valueThe study is a response to the call by Cleary et al. (2019) to utilise the results of content analysis of SEW in determining its impact on the family firms' external events. Majority of the studies are still using univariate measures (e.g. percentage of family ownership) to capture SEW. However, this study attempts to calculate the SEW scores of the family firms along these FIBER dimensions through content analysis. This helps in scrupulously capturing the impact of SEW in the internationalisation of family firms.