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Preserving Socioemotional Wealth in Family Firms: Asset or Liability? The Moderating Role of Business Context

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  • Lucia Naldi
  • Carmelo Cennamo
  • Guido Corbetta
  • Luis Gomez–Mejia

Abstract

We ask whether choices aimed at preserving socioemotional wealth (SEW) represent an asset or a liability in family–controlled firms. Specifically, we consider one major SEW–preserving mechanism—having as chief executive officer (CEO) a member of the controlling family—and hypothesize that this choice is (1) an asset in business contexts, such as industrial districts, in which tacit rules and social norms are relatively more important, but (2) a potential liability in contexts like stock exchange markets, where formal regulations and transparency principles take center stage. The results from our empirical analysis confirm these hypotheses.

Suggested Citation

  • Lucia Naldi & Carmelo Cennamo & Guido Corbetta & Luis Gomez–Mejia, 2013. "Preserving Socioemotional Wealth in Family Firms: Asset or Liability? The Moderating Role of Business Context," Entrepreneurship Theory and Practice, , vol. 37(6), pages 1341-1360, November.
    • Handle: RePEc:sae:entthe:v:37:y:2013:i:6:p:1341-1360
    DOI: 10.1111/etap.12069
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