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The Impact of Socioemotional Wealth on Decline-Stemming Strategies of Family Firms

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  • Giacomo Laffranchini
  • John S Hadjimarcou
  • Si Hyun Kim

Abstract

Calling upon stakeholder theory and the socioemotional wealth (SEW) literature, we investigate how SEW impacts the decline-stemming strategies of family firms. Drawing on a recent conceptualization of SEW, we validate a two-dimensional measurement of the construct using a content analysis technique. Our empirical test on a sample of publicly traded family firms in need of turnaround suggests that the strategic preferences of family firms change depending upon the type of SEW (extended vs. restricted) the owning family values the most. The fine-grained characterization of SEW adopted in this study accounts for within-family-firm differences and thus enables the reconciliation of conflicting findings in the literature.

Suggested Citation

  • Giacomo Laffranchini & John S Hadjimarcou & Si Hyun Kim, 2020. "The Impact of Socioemotional Wealth on Decline-Stemming Strategies of Family Firms," Entrepreneurship Theory and Practice, , vol. 44(2), pages 185-210, March.
    • Handle: RePEc:sae:entthe:v:44:y:2020:i:2:p:185-210
    DOI: 10.1177/1042258718784755
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    3. María J. Martínez-Romero & Julio Diéguez-Soto & Pieter Vandekerkhof, 2023. "Enlightening the influence of family TMT involvement on firm growth and degrowth rates," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(3), pages 581-610, September.
    4. Cambrea, Domenico Rocco & Ponomareva, Yuliya & Pittino, Daniel & Minichilli, Alessandro, 2022. "Strings attached: Socioemotional wealth mixed gambles in the cash management choices of family firms," Journal of Family Business Strategy, Elsevier, vol. 13(3).
    5. Gerken, Maike & Hülsbeck, Marcel & Ostermann, Thomas & Hack, Andreas, 2022. "Validating the FIBER scale to measure family firm heterogeneity – A replication study with extensions," Journal of Family Business Strategy, Elsevier, vol. 13(4).
    6. Liuyang Ren & Xi Zhong & Liangyong Wan, 2022. "Missing Analyst Forecasts and Corporate Fraud: Evidence from China," Journal of Business Ethics, Springer, vol. 181(1), pages 171-194, November.
    7. Temprano-García, Víctor & Pérez-Fernández, Hector & Rodríguez-Pinto, Javier & Rodríguez-Escudero, Ana Isabel & Barros-Contreras, Ismael, 2023. "How to build a brand-oriented family firm: The impact of socioemotional wealth (SEW) dimensions," Journal of Business Research, Elsevier, vol. 163(C).
    8. Guedes, Maria João & Patel, Pankaj C. & Kowalkowski, Christian & Oghazi, Pejvak, 2022. "Family business, servitization, and performance: Evidence from Portugal," Technological Forecasting and Social Change, Elsevier, vol. 185(C).
    9. Arzubiaga, Unai & Diaz-Moriana, Vanessa & Bauweraerts, Jonathan & Escobar, Octavio, 2021. "Big data in family firms: A socioemotional wealth perspective," European Management Journal, Elsevier, vol. 39(3), pages 344-352.
    10. Riad Shams, S.M. & Vrontis, Demetris & Chaudhuri, Ranjan & Chavan, Gitesh & Czinkota, Michael R., 2020. "Stakeholder engagement for innovation management and entrepreneurial development: A meta-analysis," Journal of Business Research, Elsevier, vol. 119(C), pages 67-86.
    11. Kettunen, Jukka & Martikainen, Minna & Voulgaris, Georgios, 2021. "Employment policies in private loss firms: Return to profitability and the role of family CEOs," Journal of Business Research, Elsevier, vol. 135(C), pages 373-390.

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