Family firms and their participation in cross-border acquisition waves: evidence from India

Abstract

Purpose

From the socioemotional wealth (SEW) perspective, family firms prioritize non-financial goals and show risk averse behaviour towards conducting acquisitions. In this paper, we study family firms' acquisitive behaviour while participating in CBA waves. Scholars have largely treated the cross border acquisition (CBA) wave and non-wave environments as homogeneous. We theorize that these two environments differ in their uncertainty and risk profiles on account of temporal clustering of acquisition deals. Accordingly, based on the SEW perspective, we examine the preference of family firms to participate in CBA waves.

Design/methodology/approach

The paper is based on CBAs conducted by Indian family firms between 2000 and 2018. These waves are identified by conducting a simulation based methodology.

Findings

Our findings suggest that foreign institutional ownership, firm age and acquisition relatedness moderate the relationship between family control and participation in CBA waves.

Originality/value

Our paper contributes towards the acquisitive behavior of family firms and their participation in CBA waves.

Citation

Fuad, M., Thakur, V. and Sinha, A.K. (2021), "Family firms and their participation in cross-border acquisition waves: evidence from India", Cross Cultural & Strategic Management, Vol. 28 No. 4, pp. 791-814. https://doi.org/10.1108/CCSM-05-2020-0107