TY - JOUR

T1 - Acquisition Relatedness in Family Firms

T2 - Do the Environment and the Institutional Context Matter?

AU - Pinelli, Michele

AU - Chirico, Francesco

AU - De Massis, Alfredo

AU - Zattoni, Alessandro

PY - 2023/5/2

Y1 - 2023/5/2

N2 - Research on the acquisition behaviour of family firms has produced conflicting theoretical arguments and mixed empirical findings on their propensity to acquire related or unrelated targets. While previous work has mainly focused on firm‐level variables, this study examines the environment in which family firms operate and the institutional context where acquisitions take place. Drawing on the mixed gambles logic of the behavioural agency model, we theorize that family firms are more likely than nonfamily firms to undertake related acquisitions when they operate in uncertain environments to avoid losses to the family's current socioemotional wealth. However, family firms are more likely to undertake unrelated acquisitions, when the environment is uncertain but the target operates in a similar and more developed institutional context where prospective financial gains are more predictable. Overall, building on a sample of 1014 international acquisitions, our study offers important contributions to the literature on family firms and acquisitions.

AB - Research on the acquisition behaviour of family firms has produced conflicting theoretical arguments and mixed empirical findings on their propensity to acquire related or unrelated targets. While previous work has mainly focused on firm‐level variables, this study examines the environment in which family firms operate and the institutional context where acquisitions take place. Drawing on the mixed gambles logic of the behavioural agency model, we theorize that family firms are more likely than nonfamily firms to undertake related acquisitions when they operate in uncertain environments to avoid losses to the family's current socioemotional wealth. However, family firms are more likely to undertake unrelated acquisitions, when the environment is uncertain but the target operates in a similar and more developed institutional context where prospective financial gains are more predictable. Overall, building on a sample of 1014 international acquisitions, our study offers important contributions to the literature on family firms and acquisitions.

KW - Original Article

KW - Original Articles

KW - acquisitions

KW - relatedness

KW - family firms

KW - environmental uncertainty

KW - institutional context

U2 - 10.1111/joms.12932

DO - 10.1111/joms.12932

M3 - Journal article

VL - 61

SP - 1562

EP - 1589

JO - Journal of Management Studies

JF - Journal of Management Studies

SN - 0022-2380

IS - 4

ER -