Socioemotional Wealth as a Mixed Gamble: Revisiting Family Firm R&D Investments with the Behavioral Agency Model

Luis R. Gomez–Mejia, Joanna Tochman Campbell, Geoffrey Martin, Robert E. Hoskisson, Marianna Makri and David G. Sirmon

Entrepreneurship Theory and Practice, 2014, vol. 38, issue 6, 1351-1374

Abstract: Theoretical explanations for family firm underinvestment in R&D relative to nonfamily firms remain nascent. We revisit this question using a refinement to the behavioral agency model (BAM)—the mixed gamble—that allows us to examine the socioemotional trade–offs that R&D represents for the family firm and how this differentiates their R&D investment decision from nonfamily firms. We do so in an empirical context where R&D investment is of greatest importance—high–technology industries. Moreover, we examine three contingencies that allow us to explore heterogeneity across family firms in their R&D decisions due to their effect upon the family's socioemotional wealth mixed gamble: institutional investor ownership, related diversification, and performance hazard.

Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:38:y:2014:i:6:p:1351-1374

DOI: 10.1111/etap.12083

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