To Merge, Sell, or Liquidate? Socioemotional Wealth, Family Control, and the Choice of Business Exit

Chirico, Francesco; Gómez‐Mejía, Luis R.; Hellerstedt, Karin; Withers, Michael C.; Nordqvist, Mattias

doi:10.1177/0149206318818723

Cited by 127 publications

(198 citation statements)

References 173 publications

(341 reference statements)

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“…Introducing the notion of socioemotional favoritism, they found that family CEOs are less likely to divest than non-family CEOs, especially in those foreign subsidiaries in which the family has a threshold ownership and those located in host countries where families have already lost ownership through past divestures. Chirico, Gomez-Mejia, Hellerstedt, Withers, and Nordqvist (2019) shed further light on FF post-entry processes, analyzing FF business exits. Drawing on behavioral agency theory, they found that FFs tend to endure increased financial distress to avoid losses to the family’s SEW embodied in the firm, and when exit is unavoidable, they are more likely to do so via mergers, which still saves some SEW, albeit less financially satisfying.…”

Section: The Evolution Of Ff Internationalization Research: a 30-yearmentioning

confidence: 99%

Riding the waves of family firm internationalization: A systematic literature review, integrative framework, and research agenda

Debellis

Rondi

Plakoyiannaki

et al. 2021

Journal of World Business

124

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Despite the proliferation in research efforts, family firm (FF) internationalization scholarship suffers from fragmentation, theoretical limitations, and empirical indeterminacy, leaving important facets unexplored. This article’s purpose is to unpack how this body of research has evolved over time and interfaces international business (IB) theory. We conduct a systematic literature review of relevant theoretical and empirical studies covering the last 30 years of research and comprising 134 articles. Our study contributes to this corpus of knowledge by identifying and discussing four evolutionary waves of FF internationalization research. We further advance an integrative framework that offers a comprehensive understanding of the state-of-the-art as well as promising avenues for future research at the intersection of IB and FFs.

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Section: The Evolution Of Ff Internationalization Research: a 30-yearmentioning

confidence: 99%

Riding the waves of family firm internationalization: A systematic literature review, integrative framework, and research agenda

Debellis

Rondi

Plakoyiannaki

et al. 2021

Journal of World Business

124

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“…In a related way, future studies could relate the existing findings to research on family firms. For example, family firms are less likely to exit than non-family firms (Chirico et al, 2019;Madanoglu et al, 2019); one may be interested in what the impact on family firms is when there is a separation event in the family business team.…”

Section: Discussionmentioning

confidence: 99%

Separation From the Life Partner and Exit From Self-Employment

et al. 2020

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The survival of businesses in the market often hinges on contributions of the business owner's household members. Partners of the self-employed as well as their children may, for example, provide emotional support but also cheap and flexible labor. Although the household composition of self-employed individuals has been analyzed in many earlier studies, little is known about what happens to the self-employed individual and his or her business when one separates from a life partner. We argue that separation from a life partner has profound financial and social consequences for the business owner. Specifically, we propose that a decrease in household income and social functioning (which is the degree of interference with social activities due to mental and/or physical problems) after separation from the life partner may lead to an exit from self-employment. Our empirical analysis draws on data from the longitudinal HILDA (Household, Income and Labour Dynamics in Australia) survey, for the period 2002-2017. Based on information from 4,044 self-employed individuals aged 18-64 years (18,053 individual-year observations), we find that separating from the life partner in the past year significantly increases the probability of exit from self-employment in the next year. Furthermore, we find that the positive association between separation from the life partner and exit from self-employment can be explained for 29.7% by a reduction in social functioning and for 10.7% by a reduction in household income. We study five exit routes out of self-employment and find that separation from the life partner mainly increases the probabilities of becoming a wage worker and of re-entering selfemployment after experiencing an exit. For exit to unemployment or to a position outside the labor force (voluntarily inactive/retirement or any other non-labor force position), we find insignificant relationships with separation from the life partner. Furthermore, for all exit routes except retirement, we find significant indirect effects implying that decreased household income and levels of social functioning are important mechanisms through which separation from the life partner is related to exit from self-employment.

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“…Recent family business literature offers important insights in this respect. Chirico, Gómez-Mejia, Hellerstedt, Withers, and Nordqvist (2019), for example, draw on the socioemotional wealth perspective from family business research to find that family decision makers paradoxically respond more rigidly to internal and external distress cues and are thus reluctant to exit. However, their results suggest that, when confronted with different exit options, and when distress heuristics suggest that exit is unavoidable, family decision makers tend to rely on partial forms of exit (mergers) to preserve at least part of the family's socioemotional endowment.…”

Section: Family Management / Governance and Organization Studiesmentioning

confidence: 99%

“…In contrast, others suggest that the most relevant defining feature is the family, not the business entity. Therefore, exit from or sale of the business do not necessarily mean the cessation of family influence on business entities, Special Issue of Organization Studies on "Advancing Organization Studies in Family Business Research" because the controlling family may reinvest in different economic assets or new ventures (Chirico, Gómez-Mejia, Hellerstedt, Withers, and Nordqvist, 2019;Salvato, Chirico, and Sharma, 2010).…”

Section: Transgenerational Intention and Organization Studiesmentioning

confidence: 99%

Coupling Family Business Research with Organization Studies: Interpretations, Issues and Insights

Salvato

Chirico

Мелин

et al. 2019

Organization Studies

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Family-controlled firms are the most widespread form of business organization, but they have so far attracted limited attention from organizational scholars. The present work suggests that coupling research on family business organizations with organization studies will substantially benefit both areas of scholarly research. We explore how the five core defining features of family firms-ownership, management and governance, transgenerational intention, generational involvement, and perceived identity-may be illuminated by extant research in organization studies, and how, in turn, organizational studies may be extended by investigating its key themes in the empirical context of family firms.

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To Merge, Sell, or Liquidate? Socioemotional Wealth, Family Control, and the Choice of Business Exit

Abstract: Access to the published version may require subscription. N.B. When citing this work, cite the original published paper.

Cited by 127 publications

References 173 publications

Riding the waves of family firm internationalization: A systematic literature review, integrative framework, and research agenda

Riding the waves of family firm internationalization: A systematic literature review, integrative framework, and research agenda

Separation From the Life Partner and Exit From Self-Employment

Coupling Family Business Research with Organization Studies: Interpretations, Issues and Insights

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