Socioemotional Wealth and Networking in the Internationalisation of Family SMEs

Jaakko Metsola (), Lasse Torkkeli, Tanja Leppäaho, Pia Arenius and Mika Haapanen
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Jaakko Metsola: LUT University
Lasse Torkkeli: LUT University
Tanja Leppäaho: LUT University
Pia Arenius: RMIT University

Chapter 3 in The Palgrave Handbook of Family Firm Internationalization, 2021, pp 63-101 from Springer

Abstract: Abstract In internationalisation processes, international expansion exposes family SMEs to external networking and the risks such expansion entails, and perceived threats to their socioemotional wealth (SEW) might restrain their willingness to take these actions. However, very few studies measure SEW and associate it with internationalisation. Considering SEW preservation’s prominence in family SMEs and SMEs’ heavy dependence on networking during internationalisation, we hypothesise that SEW preservation has a negative association and networking has a positive association with the family SMEs’ degree of internationalisation (DOI). We reconstruct four SEW constructs that carry significance for family SMEs—family-heritage maintenance, family-controlled decision-making, familial relationship-building and emotional decision-making—used in the SEW-related hypotheses and as moderators of networking’s effects. A multiple regression analysis of 89 Finnish SMEs (47 of which were family SMEs) suggests that emotional decision-making has a strong negative relationship and networking has a strong positive relationship with DOI. The results extend and clarify the restraining role of SEW through affective preferences and needs in family-SME internationalisation, while also emphasising the economising role of networking in offsetting dysfunctional SEW and related bifurcation bias in the long run.

Keywords: Socioemotional wealth; Emotional decision-making; Bifurcation bias; Networking; Internationalisation; Family SME (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/978-3-030-66737-5_3

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