Entrepreneurial Risk Taking in Family Firms

18 Pages Posted: 3 Jun 2005

See all articles by Shaker A. Zahra

Shaker A. Zahra

University of Minnesota - Twin Cities - Carlson School of Management

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Abstract

Family firms are widely recognized as a major source of technological innovation and economic progress. Yet, over time, some family firms become conservative and unwilling to take the risks associated with entrepreneurial activities. Adopting a broad definition of entrepreneurial risk taking, this study uses agency theory to highlight key correlates of risk taking among 209 U.S. manufacturing family firms. The results show that family ownership and involvement promote entrepreneurship, whereas the long tenures of CEO founders have the opposite effect. These results urge managers to capitalize on the skills and talents of their family members in promoting entrepreneurship and selective venturing into new market arenas.

Suggested Citation

Zahra, Shaker A., Entrepreneurial Risk Taking in Family Firms. Family Business Review, Vol. 18, No. 1, pp. 23-40, March 2005. Available at SSRN: https://ssrn.com/abstract=727285

Shaker A. Zahra (Contact Author)

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

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