Family ownership concentration and firm internationalization: integrating principal-principal and socioemotional wealth perspectives

The inherent heterogeneity characterizing the universe of family firms, especially because of the existence of different family ownership “constellations,” might explain the highly inconsistent results of the effect of family ownership on internationalization outcomes. Stemming from a principal-principal perspective, the aim of this study is to understand whether and how different levels of family ownership concentration affect the degree of firms’ internationalization. We test our main hypotheses on a sample of 455 German family firms. Our main findings suggest the existence of a U-shaped relationship between family ownership concentration and the degree of a family firm’s internationalization. Furthermore, we consider the moderating effect of socioemotional wealth (SEW) and hypothesize that a higher degree of identification of family members with the firm may reduce the negative effects of an equal distribution of family ownership among family members. We find that SEW moderates the U-shaped relationship in such a way that family firms with an equal distribution of shares among the main family shareholders reach higher degrees of internationalization when the level of SEW is high