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

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Listed:
  • Luis R. Gomez–Mejia
  • Joanna Tochman Campbell
  • Geoffrey Martin
  • Robert E. Hoskisson
  • Marianna Makri
  • David G. Sirmon

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.

Suggested Citation

  • Luis R. Gomez–Mejia & Joanna Tochman Campbell & Geoffrey Martin & Robert E. Hoskisson & Marianna Makri & David G. Sirmon, 2014. "Socioemotional Wealth as a Mixed Gamble: Revisiting Family Firm R&D Investments with the Behavioral Agency Model," Entrepreneurship Theory and Practice, , vol. 38(6), pages 1351-1374, November.
    • Handle: RePEc:sae:entthe:v:38:y:2014:i:6:p:1351-1374
    DOI: 10.1111/etap.12083
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    References listed on IDEAS

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