Do Family Firms Invest in External Corporate Venturing? An Empirical Investigation

This study investigates the propensity of family firms to engage in external corporate venturing, namely investments, aimed at exploratory search, in ventures at their early stage of development. Relying on behavioral perspectives, we investigate whether family control has an effect on the likelihood to engage in such risky and unconventional initiatives and to what extent key organizational contingencies (i.e., performance feedback and financial slack) shift socioemotional wealth preservation as reference point. We test our hypotheses on a sample of 12,320 firm-year observations gathered from 2,548 European listed firms in the period 2011-2018. We discuss the joint effect of the type of decision and the contingencies to explain family firms’ risk attitudes and, thus, contribute to family business and corporate entrepreneurship literature.