Family firms in the global economy: Toward a deeper understanding of internationalization determinants, processes, and outcomes

• Published date: 01 February 2018
• Author: Antonio Majocchi,Federico Frattini,Lucia Piscitello,Alfredo De Massis
• Date: 01 February 2018
• DOI: http://doi.org/10.1002/gsj.1199

SPECIAL ISSUE ARTICLE

Family firms in the global economy: Toward a

deeper understanding of internationalization

determinants, processes, and outcomes

Alfredo De Massis

1,2

| Federico Frattini

3

| Antonio Majocchi

4

| Lucia Piscitello

5

1

Faculty of Economics & Management, Centre for

Family Business Management, Free University of

Bozen-Bolzano, Bolzano, Italy

2

Department of Entrepreneurship, Strategy &

Innovation, Lancaster University Management

School, Lancaster, U.K.

3

Department of Management, Economics &

Industrial Engineering, School of Management,

Politecnico di Milano, Milan, Italy

4

Department of Economics and Management,

Università di Pavia, Pavia, Italy

5

Department of Management, Economics &

Industrial Engineering, Politecnico di Milano,

Milan, Italy

Correspondence

Lucia Piscitello, Politecnico di Milano, Milan,

Italy, Via Lambruschini 4/b,Milan, Italy.

Email: lucia.piscitello@polimi.it

Research Summary: Research on the internationaliza-

tion of family firms has flourished in recent years, yet the

mechanisms through which family involvement shapes

the determinants, processes, and outcomes of internation-

alization remain little understood and largely undertheor-

ized. We contribute to research at the intersection of

international business and family business by examining

the roles of different sources of family firm heterogeneity

and the context in shaping the determinants, processes,

and outcomes of business internationalization. Drawing

on this analysis, we summarize the articles published in

this special issue and set out an agenda for further

research aimed at advancing a more fine-grained and con-

textualized understanding of internationalization in family

firms.

KEYWORDS

family business, family firms, globalization,

internationalization, international diversification

1|INTRODUCTION

Family businesses dominate the economic landscape. According to the latest statistics from the Fam-

ily Firm Institute, family firms account for two-thirds of all businesses around the world, generate

around 70–90% of annual global GDP, and create 50–80% of jobs in the majority of countries

worldwide (Family Firm Institute, 2017). In the United States, one-third of S&P 500 firms are

owned/controlled and/or managed by the founding family, family firms account for 89% of total tax

returns and 64% of GDP, and they employ 62% of the total workforce (Anderson & Reeb, 2003;

Astrachan & Shanker, 2003). While the importance of family firms is even greater in Europe

Received: 12 December 2017 Accepted: 12 December 2017

DOI: 10.1002/gsj.1199

Copyright © 2017 Strategic Management Society

Global Strategy Journal. 2018;8:3–21. wileyonlinelibrary.com/journal/gsj 3

(Botero, Cruz, De Massis, & Nordqvist, 2015), they also significantly contribute to the growth of

economies in South and East Asia, Latin America, and Africa (Tharawat Magazine, 2014).

Globalization, aggressive worldwide competition, technological developments, and new growth

prospects beyond national borders increasingly force family firms toward international diversifica-

tion and global strategic growth to nurture their competitive advantage and/or to overcome economic

downturns. Internationalization allows these firms to take advantage of economies of scale, lower

labor costs and commodity prices, access to qualified and cheaper human resources and know-how

in foreign industry clusters, and local opportunities for innovation. Internationalization is widely

acknowledged as an important determinant of the sustained performance of family firms in the

global economy. Irrespective of size, these firms have recently seen significant international growth

through exports, foreign direct investment (FDI), contractual agreements, joint ventures, or a mix of

these entry modes in foreign markets. In fact, many of the world’s largest multinational companies

(MNCs) are family influenced (Casillas & Pastor, 2015), and several small- and medium-sized fam-

ily enterprises are internationally recognized for their globalization strategies (e.g., for recent analy-

sis on German Mittelstand firms, see De Massis, Audretsch, Uhlaner, & Kammerlander, 2018).

Therefore, the interest of management and organization studies in family firm internationalization

does not come as a surprise. Notwithstanding that the worldwide diffusion and international growth

of family businesses has intrigued researchers for decades, the debate on the role of family involve-

ment in influencing international diversification, growth, and performance is still far from conclusive.

The first studies on this topic were published in the late 1980s and early 1990s. As the number of

studies has grown exponentially in the last decade, the need to systematize them has recently

prompted a number of reviews and meta-analyses (Arregle, Duran, Hitt, & van Essen, 2017; Konti-

nen & Ojala, 2010; Pukall & Calabrò, 2014). Figure 1 reports the results of a search using the Web of

Science and Scopus databases.

1

The trend is similar when using Google Scholar, with only four stud-

ies in the 1980s, 11 in the 1990s, 110 in the 2000–2010 period, and 234 in the 2011–2017 period.

The main question these studies address is whether family firms internationalize less or more than

nonfamily firms generally in terms of foreign sales, exports, and—more recently—foreign direct

investments. Research thus far essentially agrees that specific aspects—such as the innate tendency of

0

7

17 15

23

38

44

98

106

63

12 16 14

21

44

75 78

0

20

40

60

80

100

120

Web of Science Scopus

FIGURE 1 Number of family business articles on

internationalization–related issues (1985–2017)

1

We searched these databases using the following keywords: “family ownership,”“family firm,”“family-owned business enterprise,”

“family coalition,”“family involvement,”“families,”“family business,”“family control,”“founder,”“founding family,”“lone

founder,”and “family business group”in combination with “internationalization,”“internationalisation, ”“entry process,”“entry,”

“international operations,”“international trade,”“globalization,”“globalisation,”“international,”“global,”“mode of entry,”

“foreign,”“export,”“international sales,”“international commitments,”“multinational,”“foreign direct investment,”and “global strat-

egy”and ensured the substantial relevance of the findings combining the keywords with the paper titles.

4DE MASSIS ET AL.