Marc van Essen

Despite its importance, there is no clear understanding of the uniqueness of family firms' internationalization. This article sheds new light on this issue with a meta-analysis of 76 studies covering 41 countries. We show that the considerable study and cross-country differences in the relationship between family firm and internationalization are explained by the roles of family control, internationalization types, and home countries' institutional contexts (i.e., minority shareholders protection and generalized trust of people from other countries). Therefore, we examine the existing divergent results using theories that reconcile some of these mixed findings and shed light on family firms' specific internationalization challenges.

We revisit the question of family firms (FFs) and their capacity for internationalization, and link it to the literature on national competitiveness. We draw widely on the FF competitive advantage and internationalization literature to argue that FFs’ organizing preferences and capabilities will typically support exporting and that these same organizing preferences will mitigate against outward FDI, two dimensions of national competitiveness. Using the logic of aggregation, we hypothesize that family firm prevalence (FFP), measured at the country level, negatively moderates a series of country-level variables associated with country outward FDI, and positively moderates a series of variables associated with country exports.We develop a unique dataset on FFP across countries using a novel method in which we extract estimates from from both published and unpublished academic studies. We develop empirical tests that are rooted in Porter's Competitive Advantage of Nations (Porter, 1990), and its extensions in the Global Competitiveness Index (GCI). Our results provide consistent confirmation of the positive moderator effect of FFP on country export performance hypothesis, but contrary to expectation, higher FFP in a country has a null or positive effect on outward FDI at the country level, thus suggesting a more nuanced view of FF strengths and weaknesses. We conclude by discussing the implications of these results for both the competitiveness and the FF literatures.

Family firms are often portrayed as an important yet conservative form of organization that is reluctant to invest in innovation; however, at the same time, evidence shows that family firms are still flourishing and that many of the world's most innovative firms are indeed family firms. Our study contributes to disentangling this puzzling effect. We argue that family firms-owing to the family's high level of control over the firm, wealth concentration, and importance of non-financial goals-invest less in innovation but have an increased conversion rate of innovation input into output and, ultimately, a higher innovation output than non-family firms. Empirical evidence from a meta-analysis based on 108 primary studies from 42 countries supports our hypotheses. We further argue and empirically show that the observed effects are even stronger when the CEO of the family firm is a later-generation family member. However, when the CEO of the family firm is the firm's founder, innovation input is higher and, contrary to our initial expectations, innovation output is lower than that in other firms. We further show that the family firm-innovation input/output relationships depend on country-level factors, namely, the level of minority shareholder protection and the education level of the workforce in the country.