Do Family Ownership and Management Matter for Internationalization of Firms? Evidences from India

Posted: 7 Sep 2017

See all articles by K. Ramachandran

K. Ramachandran

Indian School of Business (ISB), Hyderabad

Arindam Mondal

Independent

Sougata Ray

Indian Institute of Management (IIM), Calcutta

Date Written: March 17, 2016

Abstract

Even though family firms (FFs) constitute a significant proportion of the emerging multinationals (EMNEs) in some big emerging economies like India, but the role of family ownership and management in internationalization of FFs from these economies has rarely received scholarly attention. In this paper, we investigate how family ownership influences the internationalization of FFs and how the heterogeneity of FFs explains the full spectrum of internationalization of FFs - spanning from lower commitment mode of exports to higher commitment mode of overseas foreign direct investments and subsidiary formations. Anchoring our research in the socioemtional wealth perspective in family business literature and behavioral risk taking theory we theorize how internationalization trajectory of FFs differ from that of the non family firms and how non-family professional managers shape the internationalization trajectories of FFs differently than those shaped by owner-managers. We test our predictions using a proprietary, longitudinal panel data set of 213 EMNEs from India featuring in the S&P BSE 500 index covering a six year period from 2007-08 to 2012-13. We report general empirical support for most of our predictions.

Keywords: Internationalization, family firms, owner-managers, professional management, emerging economies, socio-economic wealth

Suggested Citation

Ramachandran, K. and Mondal, Arindam and Ray, Sougata, Do Family Ownership and Management Matter for Internationalization of Firms? Evidences from India (March 17, 2016). Indian School of Business WP 3031813, Available at SSRN: https://ssrn.com/abstract=3031813

K. Ramachandran (Contact Author)

Indian School of Business (ISB), Hyderabad ( email )

Hyderabad, Gachibowli 500 019
India

Arindam Mondal

Independent ( email )

Sougata Ray

Indian Institute of Management (IIM), Calcutta ( email )

Diamond Harbour Road
Kolkata, West Bengal 700104
India

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