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The entrepreneurial orientation–performance relationship in private family firms: the moderating role of socioemotional wealth

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Abstract

Drawing on socioemotional wealth (SEW) literature, this paper revisits the established entrepreneurial orientation (EO)–performance relationship in a family business context. The main idea in entrepreneurship literature is that EO leads to increased firm performance. We question this logic in a family business context because family related non-financial goals, like SEW, may prevent the firm to reap the fruits of their entrepreneurial efforts. Specifically, we argue that SEW engenders inefficiencies that place constraints on the realization of the benefits of entrepreneurship. Therefore, we propose that a high level of SEW preservation hinders the transmission of the family firm’s EO into positive performance effects. To test this hypothesis, an empirical study was developed using a sample of 232 Belgian private family firms. Robust linear regression analysis reveals that the positive effect of EO on financial performance decreases as the level of SEW preservation increases.

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Notes

  1. The sample was taken in the 2002–2003 period but our data is still appropriate to test our model since there is no indication to believe the EO–performance relationship is not stable over time (Rauch et al. 2009).

  2. In general, researchers should always calculate marginal effects even if the interaction coefficient is significant (Brambor et al. 2006; Kam and Franzese 2007).

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Acknowledgments

This research was partially funded by the National Bank of Belgium.

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Authors and Affiliations

  1. Kizok Research Center, Hasselt University, Hasselt, Belgium

    Jelle Schepers, Wim Voordeckers & Tensie Steijvers

  2. University of Antwerp, Antwerp, Belgium

    Eddy Laveren

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  1. Jelle Schepers
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  2. Wim Voordeckers
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Correspondence to Wim Voordeckers.

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Schepers, J., Voordeckers, W., Steijvers, T. et al. The entrepreneurial orientation–performance relationship in private family firms: the moderating role of socioemotional wealth. Small Bus Econ 43, 39–55 (2014). https://doi.org/10.1007/s11187-013-9533-5

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