The myth of the stay-at-home family firm: How family-managed SMEs can overcome their internationalization limitations

Jean-Francois Hennart, Antonio Majocchi () and Emanuele Forlani ()

Journal of International Business Studies, 2019, vol. 50, issue 5, No 5, 758-782

Abstract: Abstract The prevalent view among family-firm internationalization scholars is that family management discourages internationalization. This is because selling abroad is said to require more specialized managers and more resources than selling at home, and yet family firms are unwilling to recruit non-family managers with the required international skills and to dilute their control to obtain the necessary finance. We hypothesize that this argument overlooks the possibility that managers of family-managed SMEs choose business models that both minimize the above-mentioned limitations and leverage the strengths of family governance. Specifically, we argue that selling quality products in global niches allows family-managed SMEs to internationalize without the cosmopolitan managers and the high financial investments required for selling mass-market products abroad; at the same time a global niche business model requires the long time horizon and the high level of social capital that family governance can provide. Modeling a firm’s foreign sales through a gravity model, we test this hypothesis on a large sample of SMEs from four European Union countries. We find that family-managed SMEs have fewer foreign sales than other type of SMEs, but that the difference is partially bridged if family-managed SMEs have adopted a global niche business model.

Keywords: small and medium enterprises; family firms; internationalization theories and foreign market entry; global niche strategies; internationalization; gravity models (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (59)

Downloads: (external link)
http://link.springer.com/10.1057/s41267-017-0091-y Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:jintbs:v:50:y:2019:i:5:d:10.1057_s41267-017-0091-y

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/41267/PS2

DOI: 10.1057/s41267-017-0091-y

Access Statistics for this article

Journal of International Business Studies is currently edited by John Cantwell

More articles in Journal of International Business Studies from Palgrave Macmillan, Academy of International Business
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().