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Diversification Decisions in Family‐Controlled Firms

Author

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  • Luis R. Gomez‐Mejia
  • Marianna Makri
  • Martin Larraza Kintana

Abstract

This study examines diversification decisions of family firms and suggests that on average family firms diversify less both domestically and internationally than non‐family firms. When they do diversify, family firms tend to opt for domestic rather than international diversification, and those that go the latter route prefer to choose regions that are ‘culturally close’. Lastly, we find that family firms are more willing to diversify as business risk increases. The hypotheses are tested using a sample of 360 firms, 160 of them being family‐controlled and the rest (200) non‐family‐controlled.

Suggested Citation

  • Luis R. Gomez‐Mejia & Marianna Makri & Martin Larraza Kintana, 2010. "Diversification Decisions in Family‐Controlled Firms," Journal of Management Studies, Wiley Blackwell, vol. 47(2), pages 223-252, March.
    • Handle: RePEc:bla:jomstd:v:47:y:2010:i:2:p:223-252
    DOI: 10.1111/j.1467-6486.2009.00889.x
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