Skip to main content
SpringerLink
Log in

How Do Family SMEs Control Their Investments Abroad? The Role of Distance and Family Control

  • Research Article
  • Published:
Management International Review Aims and scope Submit manuscript

Abstract

We explore how family-owned small and medium-sized enterprises (SMEs) control their investments abroad: through full ownership (wholly owned subsidiaries) or sharing the ownership with other partners (joint ventures). Focusing on the role of family control (family members as CEO and/or board chair) and three dimensions of distance (cultural, geographic, and institutional) to explain this choice, we analyze 1475 foreign subsidiaries owned by 701 family SMEs and find that cultural, geographic, and institutional distance affect the choice of ownership mode in different ways. Moreover, family control moderates the relationship between distance and foreign ownership mode in the case of cultural and institutional distance, but not in that of geographic distance. Our study contributes to the international business literature by helping to explain the effect of distance on foreign ownership mode choice and by highlighting the importance of the characteristics of main decision makers. The paper also contributes to the literature on family business, shedding light on the role of family control in family SMEs’ foreign ownership mode choice. We thereby offer new insights into the preferences of family leaders and explain how, under certain conditions, when family members cover a central role in the governance, the foreign ownership modes differ.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2

Similar content being viewed by others

References

  • Agarwal, S., & Ramaswami, S. N. (1992). Choice of foreign market entry mode: Impact of ownership, location and internalization factors. Journal of International Business Studies,23(1), 1–27.

    Article  Google Scholar 

  • Ahi, A., Baronchelli, G., Kuivalainen, O., & Piantoni, M. (2017). International market entry: How do small and medium-sized enterprises make decisions? Journal of International Marketing,25(1), 1–21.

    Article  Google Scholar 

  • Alessandri, T. M., Cerrato, D., & Eddleston, K. A. (2018). The mixed gamble of internationalization in family and nonfamily firms: The moderating role of organizational slack. Global Strategy Journal,8(1), 46–72.

    Article  Google Scholar 

  • Amatori, F., Bugamelli, M., & Colli, A. (2012). Italian firms in history: Size, technology and entrepreneurship. In G. Toniolo (Ed.), The Oxford Handbook of the Italian Economy (1861–2011) (pp. 455–484). Oxford: Oxford University Press.

    Google Scholar 

  • Ambos, T. C., & Ambos, B. (2009). The impact of distance on knowledge transfer effectiveness in multinational corporations. Journal of International Management,15(1), 1–14.

    Article  Google Scholar 

  • Anand, J., & Delios, A. (1997). Location specificity and the transferability of downstream assets to foreign subsidiaries. Journal of International Business Studies,28(3), 579–603.

    Article  Google Scholar 

  • Andersen, O. (1997). Internationalization and market entry mode: A review of theories and conceptual frameworks. Management International Review,37(SI), 27–42.

    Google Scholar 

  • Anderson, E., & Gatignon, H. (1986). Modes of foreign entry: A transaction cost analysis and propositions. Journal of International Business Studies,17(3), 1–26.

    Article  Google Scholar 

  • Ando, N. (2012). The ownership structure of foreign subsidiaries and the effect of institutional distance: A case study of Japanese firms. Asia Pacific Business Review,18(2), 259–274.

    Article  Google Scholar 

  • Arregle, J. L., Duran, P., Hitt, M. A., & Essen, M. (2017). Why is family firms’ internationalization unique? A meta-analysis. Entrepreneurship Theory and Practice,41(5), 801–831.

    Article  Google Scholar 

  • Arregle, J. L., Naldi, L., Nordqvist, M., & Hitt, M. A. (2012). Internationalization of family-controlled firms: A study of the effects of external involvement in governance. Entrepreneurship Theory and Practice,36(6), 1115–1143.

    Article  Google Scholar 

  • Baronchelli, G., Bettinelli, C., Del Bosco, B., & Loane, S. (2016). The impact of family involvement on the investments of Italian small-medium enterprises in psychically distant countries. International Business Review,25(4), 960–970.

    Article  Google Scholar 

  • Batsakis, G., & Singh, S. (2019). Added distance, entry mode choice, and the moderating effect of experience: The case of British MNEs in emerging markets. Thunderbird International Business Review,61(2), 581–594.

    Article  Google Scholar 

  • Bennedsen, M., Nielsen, K. M., Pérez-González, F., & Wolfenzon, D. (2007). Inside the family firm: The role of families in succession decisions and performance. The Quarterly Journal of Economics,122(2), 647–691.

    Article  Google Scholar 

  • Berrone, P., Cruz, C., & Gómez-Mejía, L. R. (2012). Socioemotional wealth in family firms: Theoretical dimensions, assessment approaches, and agenda for future research. Family Business Review,25(3), 258–279.

    Article  Google Scholar 

  • Berrone, P., Cruz, C., Gomez-Mejia, L. R., & Larraza-Kintana, M. (2010). Socioemotional wealth and corporate responses to institutional pressures: Do family-controlled firms pollute less? Administrative Science Quarterly,55(1), 82–113.

    Article  Google Scholar 

  • Berry, H., Guillén, M. F., & Zhou, N. (2010). An institutional approach to cross-national distance. Journal of International Business Studies,41(9), 1460–1480.

    Article  Google Scholar 

  • Beugelsdijk, S., Kostova, T., Kunst, V. E., Spadafora, E., & van Essen, M. (2018). Cultural distance and firm internationalization: A meta-analytical review and theoretical implications. Journal of Management,44(1), 89–130.

    Article  Google Scholar 

  • Bhaumik, S. K., Driffield, N., & Pal, S. (2010). Does ownership structure of emerging-market firms affect their outward FDI? The case of the Indian automotive and pharmaceutical sectors. Journal of International Business Studies,41(3), 437–450.

    Article  Google Scholar 

  • Boeh, K. K., & Beamish, P. W. (2012). Travel time and the liability of distance in foreign direct investment: Location choice and entry mode. Journal of International Business Studies,43(5), 525–535.

    Article  Google Scholar 

  • Boellis, A., Mariotti, S., Minichilli, A., & Piscitello, L. (2016). Family involvement and firms’ establishment mode choice in foreign markets. Journal of International Business Studies,47(8), 929–950.

    Article  Google Scholar 

  • Brouthers, K. D. (2002). Institutional, cultural and transaction cost influences on entry mode choice and performance. Journal of International Business Studies,33(2), 203–221.

    Article  Google Scholar 

  • Brouthers, K. D., & Brouthers, L. E. (2001). Explaining the national cultural distance paradox. Journal of International Business Studies,32(1), 177–189.

    Article  Google Scholar 

  • Brouthers, K. D., & Hennart, J. F. (2007). Boundaries of the firm: Insights from international entry mode research. Journal of management,33(3), 395–425.

    Article  Google Scholar 

  • Bruneel, J., & De Cock, R. (2016). Entry mode research and SMEs: A review and future research agenda. Journal of Small Business Management,54(S1), 135–167.

    Article  Google Scholar 

  • Canabal, A., & White, G. O. (2008). Entry mode research: Past and future. International Business Review,17(3), 267–284.

    Article  Google Scholar 

  • Caprio, L., Croci, E., & Del Giudice, A. (2011). Ownership structure, family control, and acquisition decisions. Journal of Corporate Finance,17(5), 1636–1657.

    Article  Google Scholar 

  • Caputo, A., Marzi, G., Pellegrini, M. M., & Rialti, R. (2018). Conflict management in family businesses: A bibliometric analysis and systematic literature review. International Journal of Conflict Management,29(4), 519–542.

    Article  Google Scholar 

  • CEPII (2007). http://www.cepii.fr/CEPII/en/bdd_modele/presentation.asp?id=6 (last retrieved 14 November 2018).

  • Cesinger, B., Hughes, M., Mensching, H., Bouncken, R., Fredrich, V., & Kraus, S. (2016). A socioemotional wealth perspective on how collaboration intensity, trust, and international market knowledge affect family firms’ multinationality. Journal of World Business,51(4), 586–599.

    Article  Google Scholar 

  • Chang, Y. C., Kao, M. S., & Kuo, A. (2014). The influences of governance quality on equity-based entry mode choice: The strengthening role of family control. International Business Review,23(5), 1008–1020.

    Article  Google Scholar 

  • Cho, K. R., & Padmanabhan, P. (2005). Revisiting the role of cultural distance in MNC’s foreign ownership mode choice: The moderating effect of experience attributes. International Business Review,14(3), 307–324.

    Article  Google Scholar 

  • Chrisman, J. J., & Patel, P. C. (2012). Variations in R&D investments of family and nonfamily firms: Behavioral agency and myopic loss aversion perspectives. Academy of Management Journal,55(4), 976–997.

    Article  Google Scholar 

  • Claver, E., Rienda, L., & Quer, D. (2007). The internationalisation process in family firms: Choice of market entry strategies. Journal of General Management,33(1), 1–14.

    Article  Google Scholar 

  • Claver, E., Rienda, L., & Quer, D. (2008). Family firms’ risk perception: Empirical evidence on the internationalization process. Journal of Small Business and Enterprise Development,15(3), 457–471.

    Article  Google Scholar 

  • Contractor, F. J., Lahiri, S., Elango, B., & Kundu, S. K. (2014). Institutional, cultural and industry related determinants of ownership choices in emerging market FDI acquisitions. International Business Review,23(5), 931–941.

    Article  Google Scholar 

  • Cyert, R. M., & March, J. G. (1963). A behavioral theory of the firm. Englewood Cliffs: Prentice Hall.

    Google Scholar 

  • D’Angelo, A., Majocchi, A., & Buck, T. (2016). External managers, family ownership and the scope of SME internationalization. Journal of World Business,51(4), 534–547.

    Article  Google Scholar 

  • Daft, R. L., & Lengel, R. H. (1986). Organizational information requirements, media richness and structural design. Management Science,32(5), 554–571.

    Article  Google Scholar 

  • De Massis, A., & Foss, N. (2018). Advancing family business research: The promise of microfoundations. Family Business Review,31(4), 386–396.

    Google Scholar 

  • De Massis, A., Frattini, F., Majocchi, A., & Piscitello, L. (2018). Family firms in the global economy: Toward a deeper understanding of internationalization determinants, processes, and outcomes. Global Strategy Journal,8(1), 3–21.

    Article  Google Scholar 

  • Delios, A., & Beamish, P. W. (1999). Geographic scope, product diversification, and the corporate performance of Japanese firms. Strategic Management Journal,20(8), 711–727.

    Article  Google Scholar 

  • Demirbag, M., Tatoglu, E., & Glaister, K. W. (2009). Equity-based entry modes of emerging country multinationals: Lessons from Turkey. Journal of World Business,44(4), 445–462.

    Article  Google Scholar 

  • Dibrell, C., & Memili, E. (2019). A brief history and a look to the future of family business heterogeneity: An introduction. In E. Memili & C. Dibrell (Eds.), The Palgrave handbook of heterogeneity among family firms (pp. 1–15). New York: Palgrave Macmillan.

    Google Scholar 

  • Dikova, D., Sahib, P. R., & Van Witteloostuijn, A. (2010). Cross-border acquisition abandonment and completion: The effect of institutional differences and organizational learning in the international business service industry, 1981–2001. Journal of International Business Studies,41(2), 223–245.

    Article  Google Scholar 

  • Dow, D., & Ferencikova, S. (2010). More than just national cultural distance: Testing new distance scales on FDI in Slovakia. International Business Review,19(1), 46–58.

    Article  Google Scholar 

  • Dow, D., & Karunaratna, A. (2006). Developing a multidimensional instrument to measure psychic distance stimuli. Journal of International Business Studies,37(5), 578–602.

    Article  Google Scholar 

  • Dow, D., & Larimo, J. (2009). Challenging the conceptualization and measurement of distance and international experience in entry mode choice research. Journal of International Marketing,17(2), 74–98.

    Article  Google Scholar 

  • Driffield, N., Mickiewicz, T., & Temouri, Y. (2016). Ownership control of foreign affiliates: A property rights theory perspective. Journal of World Business,51(6), 965–976.

    Article  Google Scholar 

  • Erramilli, M. K. (1991). The experience factor in foreign market entry behavior of service firms. Journal of International Business Studies,22(3), 479–501.

    Article  Google Scholar 

  • Erramilli, M. K., & D’Souza, D. E. (1993). Venturing into foreign markets: The case of the small service firm. Entrepreneurship: Theory and Practice,17(4), 29–42.

    Google Scholar 

  • Erramilli, M. K., & Rao, C. P. (1993). Service firms’ international entry-mode choice: A modified transaction-cost analysis approach. The Journal of Marketing,57(3), 19–38.

    Google Scholar 

  • Evans, J., & Mavondo, F. T. (2002). Psychic distance and organizational performance: An empirical examination of international retailing operations. Journal of International Business Studies,33(3), 515–532.

    Article  Google Scholar 

  • Evenett, S. J., & Keller, W. (2002). On theories explaining the success of the gravity equation. Journal of political economy,110(2), 281–316.

    Article  Google Scholar 

  • Felin, T., Foss, N. J., & Ployhart, R. E. (2015). The microfoundations movement in strategy and organization theory. Academy of Management Annals,9(1), 575–632.

    Article  Google Scholar 

  • Fernandez, Z., & Nieto, M. J. (2014). Internationalization of family firms. In L. Melin, et al. (Eds.), The SAGE handbook of family business. Thousand Oaks: Sage Publications.

    Google Scholar 

  • Filatotchev, I., Strange, R., Piesse, J., & Lien, Y. C. (2007). FDI by firms from newly industrialised economies in emerging markets: Corporate governance, entry mode and location. Journal of International Business Studies,38(4), 556–572.

    Article  Google Scholar 

  • Finkelstein, S., & D’Aveni, R. A. (1994). CEO duality as a double-edged sword: How boards of directors balance entrenchment avoidance and unity of command. Academy of Management Journal,37(5), 1079–1108.

    Google Scholar 

  • Finkelstein, S., Hambrick, D. C., & Cannella, A. A. (2009). Strategic leadership: Theory and research on executives, top management teams, and boards. Oxford: Oxford University Press.

    Google Scholar 

  • Fladmoe-Lindquist, K., & Jacque, L. L. (1995). Control modes in international service operations: The propensity to franchise. Management Science,41(7), 1238–1249.

    Article  Google Scholar 

  • Foss, N. J., & Pedersen, T. (2016). Microfoundations in strategy research. Strategic Management Journal,37(13), E22–E34.

    Article  Google Scholar 

  • Frank, H., Kessler, A., Nosé, L., & Suchy, D. (2011). Conflicts in family firms: State of the art and perspectives for future research. Journal of Family Business Management,1(2), 130–153.

    Article  Google Scholar 

  • Gatignon, H., & Anderson, E. (1988). The multinational corporation’s degree of control over foreign subsidiaries: An empirical test of a transaction cost explanation. Journal of Law Economics and Organization,4(2), 305–336.

    Google Scholar 

  • Gersick, K. E., Davis, J. A., McCollom, H. M., & Lansberg, I. (1997). Generation to generation: Life cycles of the family business. Cambridge: Harvard Business Press.

    Google Scholar 

  • Ghemawat, P. (2001). Distance still matters. The hard reality of global expansion. Harvard Business Review,79, 137–147.

    Google Scholar 

  • Gómez-Mejía, L. R., Cruz, C., Berrone, P., & De Castro, J. (2011). The bind that ties: Socioemotional wealth preservation in family firms. Academy of Management Annals,5(1), 653–707.

    Article  Google Scholar 

  • Gómez-Mejía, L. R., Haynes, K. T., Núñez-Nickel, M., Jacobson, K. J., & Moyano-Fuentes, J. (2007). Socioemotional wealth and business risks in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly,52(1), 106–137.

    Article  Google Scholar 

  • Gómez-Mejía, L. R., Makri, M., & Kintana, M. L. (2010). Diversification decisions in family controlled firms. Journal of Management Studies,47(2), 223–252.

    Article  Google Scholar 

  • Gooris, J., & Peeters, C. (2014). Home–host country distance in offshore governance choices. Journal of International Management,20(1), 73–86.

    Article  Google Scholar 

  • Graves, C., & Thomas, J. (2008). Determinants of the internationalization pathways of family firms: An examination of family influence. Family Business Review,21(2), 151–167.

    Article  Google Scholar 

  • Habbershon, T. G., & Williams, M. L. (1999). A resource-based framework for assessing the strategic advantages of family firms. Family Business Review,12(1), 1–25.

    Article  Google Scholar 

  • Häkanson, L., & Ambos, B. (2010). The antecedents of psychic distance. Journal of International Management,16(3), 195–210.

    Article  Google Scholar 

  • Harzing, A. W. (2003). The role of culture in entry-mode studies: From neglect to myopia? In Managing multinationals in a knowledge economy: Economics, culture (pp. 75–127). Emerald Group Publishing Limited.

  • Hennart, J. F. (2010). Transaction cost theory and international business. Journal of Retailing,86(3), 257–269.

    Article  Google Scholar 

  • Hennart, J. F., & Larimo, J. (1998). The impact of culture on the strategy of multinational enterprises: Does national origin affect ownership decisions? Journal of International Business Studies,29(3), 515–538.

    Article  Google Scholar 

  • Hennart, J. F., & Reddy, S. B. (2000). Digestibility and asymmetric information in the choice between acquisitions and joint ventures: Where’s the beef? Strategic Management Journal,21(2), 191–193.

    Article  Google Scholar 

  • Hernández, V., Nieto, M. J., & Boellis, A. (2018). The asymmetric effect of institutional distance on international location: Family versus nonfamily firms. Global Strategy Journal,8(1), 22–45.

    Article  Google Scholar 

  • Hofstede, G. H. (1980). Culture’s consequences: International differences in work-related values. Beverly Hills: Sage Publications.

    Google Scholar 

  • Hofstede, G. H. (1991). Cultures and organizations: Software of the mind. Berkshire: McGraw-Hill.

    Google Scholar 

  • Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions, and organizations across cultures. Thousand Oaks: Sage Publications.

    Google Scholar 

  • Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and organizations: Software of the mind (3rd ed.). New York: McGraw-Hill.

    Google Scholar 

  • Hossain, M., & Kauranen, I. (2016). Open innovation in SMEs: A systematic literature review. Journal of Strategy and Management,9(1), 58–73.

    Article  Google Scholar 

  • Hutzschenreuter, T., Kleindienst, I., & Lange, S. (2016). The concept of distance in international business research: A review and research agenda. International Journal of Management Reviews,18(2), 160–179.

    Article  Google Scholar 

  • Johanson, J., & Vahlne, J.-E. (1977). The internationalization process of the firm-a model of knowledge development and increasing foreign market commitments. Journal of International Business Studies,8(1), 23–32.

    Article  Google Scholar 

  • Johanson, J., & Vahlne, J.-E. (2009). The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies,40(9), 1411–1431.

    Article  Google Scholar 

  • Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica,47(2), 263–291.

    Article  Google Scholar 

  • Kao, M. S., & Kuo, A. (2017). The effect of uncertainty on FDI entry mode decisions: The influence of family ownership and involvement in the board of directors. Journal of Family Business Strategy,8(4), 224–236.

    Article  Google Scholar 

  • Kaufmann, D., Kraay, A., & Mastruzzi, M. (2010). Response to ‘What do the worldwide governance indicators measure?’. The European Journal of Development Research,22(1), 55–58.

    Article  Google Scholar 

  • Kellermanns, F. W., & Eddleston, K. A. (2004). Feuding families: When conflict does a family firm good. Entrepreneurship theory and Practice,28(3), 209–228.

    Article  Google Scholar 

  • Knockaert, M., Bjornali, E. S., & Erikson, T. (2015). Joining forces: Top management team and board chair characteristics as antecedents of board service involvement. Journal of Business Venturing,30(3), 420–435.

    Article  Google Scholar 

  • Kogut, B., & Singh, H. (1988). The effect of national culture on the choice of entry mode. Journal of International Business Studies,19(3), 411–432.

    Article  Google Scholar 

  • Kontinen, T., & Ojala, A. (2010). The internationalization of family businesses: A review of extant research. Journal of Family Business Strategy,1(2), 97–107.

    Article  Google Scholar 

  • Kontinen, T., & Ojala, A. (2012). Internationalization pathways among family-owned SMEs. International Marketing Review,29(5), 496–518.

    Article  Google Scholar 

  • Kostova, T., & Zaheer, S. (1999). Organizational legitimacy under conditions of complexity: The case of the multinational enterprise. Academy of Management Review,24(1), 64–81.

    Article  Google Scholar 

  • Kotlar, J., & De Massis, A. (2013). Goal setting in family firms: Goal diversity, social interactions, and collective commitment to family-centered goals. Entrepreneurship Theory and Practice,37(6), 1263–1288.

    Article  Google Scholar 

  • Kraus, S., Ambos, T. C., Eggers, F., & Cesinger, B. (2015). Distance and perceptions of risk in internationalization decisions. Journal of Business Research,68(7), 1501–1505.

    Article  Google Scholar 

  • Kuo, A., Kao, M. S., Chang, Y. C., & Chiu, C. F. (2012). The influence of international experience on entry mode choice: Difference between family and non-family firms. European Management Journal,30(3), 248–263.

    Article  Google Scholar 

  • Laufs, K., & Schwens, C. (2014). Foreign market entry mode choice of small and medium-sized enterprises: A systematic review and future research agenda. International Business Review,23(6), 1109–1126.

    Article  Google Scholar 

  • Leamer, E. E., & Storper, M. (2001). The economic geography of the internet age. Journal of International Business Studies,32(4), 641–665.

    Article  Google Scholar 

  • Liou, R.-S., Chao, M. C.-H., & Yang, M. (2016). Emerging economies and institutional quality: Assessing the differential effects of institutional distances on ownership strategy. Journal of World Business,51(4), 600–611.

    Article  Google Scholar 

  • López-Duarte, C., & Vidal-Suárez, M. M. (2010). External uncertainty and entry mode choice: Cultural distance, political risk and language diversity. International Business Review,19(6), 575–588.

    Article  Google Scholar 

  • Lu, J. W., & Beamish, P. W. (2001). The internationalization and performance of SMEs. Strategic Management Journal,22(6–7), 565–586.

    Article  Google Scholar 

  • Luo, Y. (2001). Determinants of entry in an emerging economy: A multilevel approach. Journal of Management Studies,38(3), 443–472.

    Article  Google Scholar 

  • Machold, S., Huse, M., Minichilli, A., & Nordqvist, M. (2011). Board leadership and strategy involvement in small firms: A team production approach. Corporate Governance: An International Review,19(4), 368–383.

    Article  Google Scholar 

  • Majocchi, A., & Presutti, M. (2009). Industrial clusters, entrepreneurial culture and the social environment: The effects on FDI distribution. International Business Review,18(1), 76–88.

    Article  Google Scholar 

  • Malhotra, S. (2012). Geographic distance as a moderator of curvilinear relationship between cultural distance and shared ownership. Canadian Journal of Administrative Sciences,29(3), 218–230.

    Article  Google Scholar 

  • Martín Martín, O., & Drogendijk, R. (2014). Country distance (COD): Development and Validation of a new objective measure. Journal of Small Business Management,52(1), 102–125.

    Article  Google Scholar 

  • Miller, D., & Le Breton-Miller, I. (2005). Managing for the long run: Lessons in competitive advantage from great family businesses. Cambridge: Harvard Business Press.

    Google Scholar 

  • Miller, D., Le Breton-Miller, I., Minichilli, A., Corbetta, G., & Pittino, D. (2014). When do non-family CEOs outperform in family firms? Agency and behavioural agency perspectives. Journal of Management Studies,51(4), 547–572.

    Article  Google Scholar 

  • Miller, D., Lee, J., Chang, S., & Le Breton-Miller, I. (2009). Filling the institutional void: The social behavior and performance of family vs non-family technology firms in emerging markets. Journal of International Business Studies,40(5), 802–817.

    Article  Google Scholar 

  • Miller, D., Minichilli, A., & Corbetta, G. (2013). Is family leadership always beneficial? Strategic Management Journal,34(5), 553–571.

    Article  Google Scholar 

  • Minichilli, A., Corbetta, G., & MacMillan, I. C. (2010). Top management teams in family-controlled companies: ‘familiness’, ‘faultlines’, and their impact on financial performance. Journal of Management Studies,47(2), 205–222.

    Article  Google Scholar 

  • Morschett, D., Schramm-Klein, H., & Swoboda, B. (2010). Decades of research on market entry modes: What do we really know about external antecedents of entry mode choice? Journal of International Management,16(1), 60–77.

    Article  Google Scholar 

  • Musteen, M., Datta, D. K., & Herrmann, P. (2009). Ownership structure and CEO compensation: Implications for the choice of foreign market entry modes. Journal of International Business Studies,40(2), 321–338.

    Article  Google Scholar 

  • Nicholson, N. (2008). Evolutionary psychology and family business: A new synthesis for theory, research, and practice. Family Business Review,21(1), 103–118.

    Article  Google Scholar 

  • Oehmichen, J., & Puck, J. (2016). Embeddedness, ownership mode and dynamics, and the performance of MNE subsidiaries. Journal of International Management,22(1), 17–28.

    Article  Google Scholar 

  • Padmanabhan, P., & Cho, K. R. (1996). Ownership strategy for a foreign affiliate: An empirical investigation of Japanese firms. Management International Review,36(1), 45–65.

    Google Scholar 

  • Pongelli, C., Caroli, M. G., & Cucculelli, M. (2016). Family business going abroad: The effect of family ownership on foreign market entry mode decisions. Small Business Economics,3(47), 787–801.

    Article  Google Scholar 

  • Powell, K. S., & Lim, E. (2018). Motive meets experience: Cultural distance, motive, related experience, and foreign subsidiary ownership structure. Journal of Business Research,92, 81–92.

    Article  Google Scholar 

  • Prügl, R. (2019). Capturing the heterogeneity of family firms: Reviewing scales to directly measure socioemotional wealth. In E. Memili & C. Dibrell (Eds.), The Palgrave handbook of heterogeneity among family firms (pp. 461–484). New York: Palgrave Macmillan.

    Chapter  Google Scholar 

  • Pukall, T. J., & Calabrò, A. (2014). The internationalization of family firms: A critical review and integrative model. Family Business Review,27(2), 103–125.

    Article  Google Scholar 

  • Ragozzino, R. (2009). The effects of geographic distance on the foreign acquisition activity of US firms. Management International Review,49(4), 509–535.

    Article  Google Scholar 

  • Reuber, A. R. (2016). An assemblage-theoretic perspective on the internationalization processes of family firms. Entrepreneurship Theory and Practice,40(6), 1269–1286.

    Article  Google Scholar 

  • SACE (2018). Rapporto Export 2018 https://www.sace.it/docs/default-source/ufficio-studi/sace–rapporto-export-2018.pdf?sfvrsn=4. Retrieved 14 November 2018.

  • Scott, W. R. (1995). Institutions and organizations. Thousand Oaks: Sage Publications.

    Google Scholar 

  • Scott, W. R., & Meyer, J. W. (1994). Institutional environments and organizations: Structural complexity and individualism. Thousand Oaks: Sage Publications.

    Google Scholar 

  • Segaro, E. L., Larimo, J., & Jones, M. V. (2014). Internationalisation of family small and medium sized enterprises: The role of stewardship orientation, family commitment culture and top management team. International Business Review,23(2), 381–395.

    Article  Google Scholar 

  • Sharma, P., Melin, L., & Nordqvist, M. (2014). Scope, Evolution and Future of Family Business Studies. In L. Melin, et al. (Eds.), SAGE handbook of family business (pp. 620–628). Thousand Oaks: Sage Publications.

    Chapter  Google Scholar 

  • Shenkar, O. (2001). Cultural distance revisited: Towards a more rigorous conceptualization and measurement of cultural differences. Journal of International Business Studies,32(3), 519–535.

    Article  Google Scholar 

  • Slangen, A. H., & Van Tulder, R. J. (2009). Cultural distance, political risk, or governance quality? Towards a more accurate conceptualization and measurement of external uncertainty in foreign entry mode research. International Business Review,18(3), 276–291.

    Article  Google Scholar 

  • Sousa, C. M., & Bradley, F. (2008). Cultural distance and psychic distance: Refinements in conceptualisation and measurement. Journal of Marketing Management,24(5–6), 467–488.

    Article  Google Scholar 

  • Strange, R., Filatotchev, I., Lien, Y., & Piesse, J. (2009). Insider control and the FDI location decision. Management International Review,49(4), 433–454.

    Article  Google Scholar 

  • Tihanyi, L., Griffith, D. A., & Russell, C. J. (2005). The effect of cultural distance on entry mode choice, international diversification, and MNE performance: A meta-analysis. Journal of International Business Studies,36(3), 270–283.

    Article  Google Scholar 

  • Union, European. (2003). Commission Recommendation of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises. Official Journal of the European Union,46, 36–41.

    Google Scholar 

  • Wiseman, R. M., & Gomez-Mejia, L. R. (1998). A behavioral agency model of managerial risk taking. Academy of Management Review,23(1), 133–153.

    Article  Google Scholar 

  • World Bank. (2016). http://data.worldbank.org/.

  • Wu, Z., Chua, J. H., & Chrisman, J. J. (2007). Effects of family ownership and management on small business equity financing. Journal of Business Venturing,22(6), 875–895.

    Article  Google Scholar 

  • Yamanoi, J., & Asaba, S. (2018). The impact of family ownership on establishment and ownership modes in foreign direct investment: The moderating role of corruption in host countries. Global Strategy Journal,8(1), 106–135.

    Article  Google Scholar 

  • Zahra, S. A. (2003). International expansion of US manufacturing family businesses: The effect of ownership and involvement. Journal of Business Venturing,18(4), 495–512.

    Article  Google Scholar 

  • Zhang, M. M. (2015). Cross-national distance and insidership within networks: Japanese MNCs’ ownership strategies in their overseas subsidiaries. Asia Pacific Business Review,21(3), 403–423.

    Article  Google Scholar 

  • Zhao, H., Luo, Y., & Suh, T. (2004). Transaction cost determinants and ownership-based entry mode choice: A meta-analytical review. Journal of International Business Studies,35(6), 524–544.

    Article  Google Scholar 

Download references

Acknowledgements

We thank Professor Michael-Jörg Oesterle for his editorial guidance and two anonymous reviewers for their very insightful suggestions during the review process. We would like to thank Gianpaolo Baronchelli for his support in the initial phase of this work and Federica Viganò for her competent assistance in data collection. We also thank participants to the 2017 EIBA conference (Milan, Italy) and the research workshop “Exploring the relationships between innovation and internationalisation of family firms across Europe” (Trento, Italy) for their feedback. We are grateful to the University of Bergamo and the University of Milano - Bicocca for supporting this research.

Author information

Authors and Affiliations

  1. Department of Business and Law, University of Milano - Bicocca, Milan, Italy

    Barbara Del Bosco

  2. Department of Management, Economics and Quantitative Methods, University of Bergamo, Bergamo, Italy

    Cristina Bettinelli

Authors
  1. Barbara Del Bosco
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Cristina Bettinelli
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Barbara Del Bosco.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Del Bosco, B., Bettinelli, C. How Do Family SMEs Control Their Investments Abroad? The Role of Distance and Family Control. Manag Int Rev 60, 1–35 (2020). https://doi.org/10.1007/s11575-019-00406-6

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11575-019-00406-6

Keywords

Search

Navigation