Unveiling new opportunities: A mixed gamble approach to external search breadth within family firms

This study introduces the idea that external search breadth constitutes a ‘mixed gamble’ where family firms face a unique trade-off between financial and socioemotional wealth (SEW) gains and losses. Considering the peculiarities of family firms, we examine the distinctive influence that two sources of family firm heterogeneity, namely family management and family generational stage, have on the mixed gamble of external search breadth. In addition, we also investigate export propensity as a contingent factor with the potential to alter the manners in which family management and family generational stage affect the external search breadth mixed gamble. Using a longitudinal sample of 1240 Spanish family firms, we empirically find that family firms with greater family management and in first-generation attach more importance to current SEW losses than to potential financial and SEW gains, resulting in lower external search breadth. Furthermore, we find that export propensity alters family managers' mixed gamble of external search breadth, so that current SEW losses become less pronounced in the financial and SEW trade-off, which leads to a higher external search breadth.