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http://localhost:8080/xmlui/handle/123456789/448| Title: | Foreign market Entry Modes of Family Firms: A Review and Research Agenda |
| Authors: | Jain, Apoorva |
| Keywords: | Foreign Market |
| Issue Date: | 2024 |
| Publisher: | Journal of Business Research |
| Abstract: | Although research on foreign market entry mode choice is spread across various aspects and dimensions, a comprehensive review that accumulates the knowledge holistically in the context of family firms is sparse. To address this gap, the study systematically reviews 50 research articles and presents state-of-the-art literature for around three decades (1993–2021) by employing PRISMA and Theory – Context – Characteristics – Methodology (TCCM) framework. The objective of the study is to understand: (i) the theories that explain the factors affecting the entry mode choice of family firms (ii) the contexts (i.e. industries and countries) in which the underlying research has been investigated (iii) the characteristics or the factors (i.e. independent, moderating, and dependent variables) that explain the entry mode choice of family firms, and (iv) the methods that have been employed to understand the underlying research area. Based upon the review, the study set forth the future research agenda with respect to each of the dimensions of the TCCM framework. The study proposes a holistic framework offering the future direction to the research scholars, to explore - How “peculiar family firm characteristics” play a moderating role in determining the foreign market entry mode strategies of family firms? |
| Description: | A family firm is defined as an organisation in which the descendants of the founding family continue to serve on the board, hold positions in the top management, or are blockholders (Cheng, 2014). As an important organisational form, two-third of all businesses around the globe are owned and/or controlled by families (Kanwar, 2018). They contribute nearly 70–90% to the global GDP annually and create 50–80% jobs worldwide (Kanwar, 2018). According to a survey done by EY and University of St. Gallan in 2023, the largest 500 family businesses employ 24.5 million people and generate US $8.02 trillion in revenue. Thus, family firms are vital for the growth and well-being of every country’s economy (Robertsson, 2023). Despite the widely held assumption that family firms are familial-oriented, risk-averse, and mainly operate locally, the integration of the world economy has spurred firms of all ownership types to expand their operations internationally in order to stay ahead of competitors (Zahra & George, 2002). Notably, family firms balance contradictory forces i.e., the desire to preserve family control, values, and tradition by staying grounded in the home country (Gomez-Mejía et al., 2011), and the need to exploit the opportunities at the global marketplace (Arregle et al., 2017). Family firms possess various idiosyncratic characteristics that make their internationalisation unique (Arregle et al., 2017). While non-family firms encounter potential economic gains and losses, family firms face a “mixed gamble” (Alessandri et al., 2018, Gomez-Mejia et al., 2018) wherein they weigh potential gains and losses among their two types of wealth – financial wealth and socioemotional wealth (SEW). The SEW is defined as the “non-financial aspects of the firm that meet the family’s affective needs, such as identity, the ability to exercise family influence, and the perpetuation of the family dynasty” (Gómez-Mejía et al., 2007). The term SEW presents the notion that since families seek to preserve SEW; the family members’ social capital, altruism and emotions affect the decision-making process in the family firms (Gómez-Mejía et al., 2007). Thus, the coexistence of financial and non-financial wealth is one of the unique characteristics of family firms that affect their internationalisation strategies (Debellis et al., 2021). Consequently, we believe that these peculiar family characteristics would affect the decision of family firms in choosing their foreign market entry mode strategies. Hence, it becomes imperative to understand the role of these peculiar family characteristics in determining the foreign market entry mode strategies of family firms. Entry mode – the operational form deployed to enter the international markets – determines the success or failure of a firm in the global marketplace (Brouthers & Hennart, 2007). Results on family firms’ entry mode choice are inconclusive wherein some scholars contend that in order to preserve family control and influence, family firms prefer wholly-owned subsidiary (WOS) over joint venture (JV) (Abdellatif et al., 2010); while others observe that since family firms are risk-averse, they prefer entering foreign markets through JV since it allows them to share risks with the partner abroad (Kuo et al., 2012, Chrisman et al., 2013); while some others believe that family firms majorly prefer entering foreign markets through exports (Kuo et al., 2012) since the need to employ external expertise coupled with limited financial resources rules out equity entry mode options (Thomas & Graves, 2005). Thus, it is observed that family-specific factors make entry mode strategies of family firms different from that of non-family firms. Consequently, it is grabbing the attention of various researchers in the recent past to understand the factors that affect family firms' internationalisation strategies in terms of their entry mode decisions. |
| URI: | https://doi.org/10.1016/j.jbusres.2023.114407 https://www.sciencedirect.com/journal/journal-of-business-research |
| Appears in Collections: | VSBS |
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