Publication Type

Journal Article

Version

submittedVersion

Publication Date

4-2023

Abstract

This study examines how large family firms react to a macroeconomic shock in terms of their internationalization depth and breadth. Building on new internalization theory and acknowledging the dysfunctional manifestations of bifurcation bias in large family-owned MNEs, we argue that an unexpected shock induces family firms to recombine their family firm-specific resources with their thus far underutilized or unequally treated nonfamily resources. This recombination allows most family firms to economize on bifurcation bias and leverage their resources as firm-specific advantages (FSAs) resulting in an increased depth and breadth of internationalization post shock (while some of them may continue to suffer from bifurcation bias). Testing our theory on a panel dataset incorporating large familyowned (compared to nonfamily-owned) MNEs headquartered in Germany before and after the global financial crisis lends support to our theory. We discuss how our study contributes to new internalization theory, to the broader IB literature on MNEs’ unexpected shock response, and to family firm internationalization research.

Keywords

Family firms, MNEs, macroeconomic shock, global financial crisis, bifurcation bias, family firm-specific resources, FDI, market entry

Discipline

Entrepreneurial and Small Business Operations | International Business | Strategic Management Policy

Research Areas

Strategy and Organisation

Publication

Journal of World Business

Volume

58

Issue

3

First Page

1

Last Page

53

ISSN

1090-9516

Identifier

10.1016/j.jwb.2023.101428

Publisher

Elsevier

Embargo Period

1-25-2023

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1016/j.jwb.2023.101428

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