Give play to strengths or overcome weaknesses? The impact of family involvement on exploitative and exploratory OFDI

Abstract

Purpose

This study explores the impact of family ownership and management on exploitative and exploratory outward foreign direct investment (OFDI) in family businesses in emerging economies, as well as the moderating effects of intra-family successions and founder CEOs.

Design/methodology/approach

The authors empirically tested the hypotheses based on the data of Chinese listed manufacturing family enterprises from 2009 to 2018.

Findings

Family ownership does not significantly reduce exploitative OFDI but significantly increases exploratory OFDI. When family offspring have succession intentions, these relationships are strengthened. Additionally, family management is negatively associated with exploitative OFDI and positively associated with exploratory OFDI. Founder CEOs have a positive moderating effect on the relationship between family management and exploitative and exploratory OFDI.

Originality/value

This study is the first attempt to introduce exploitative and exploratory OFDI into the internationalization of family enterprises. The research goes beyond internationalization as a single concept and provides new evidence to solve the controversy about how family involvement affects family firms’ internationalization. On the other hand, the authors respond to the call to understand the impact of family heterogeneity on internationalization by systematically examining the influence of four important family heterogeneity characteristics on family firms’ OFDI choice.

Citation

Yang, X., Shang, H. and Li, W. (2022), "Give play to strengths or overcome weaknesses? The impact of family involvement on exploitative and exploratory OFDI", Baltic Journal of Management, Vol. 17 No. 3, pp. 304-320. https://doi.org/10.1108/BJM-05-2021-0204