An Integrative Framework of Family Firms and Foreign Entry Strategies



While there is a vast amount of research on entry mode in general and family firms’ internationalisation, little attention has been paid to family firms’ foreign entry strategies. Integrating contributions to transaction cost theory and resource-based view from both streams of research, this chapter provides an integrative framework to guide further the development of the research on how family firms choose between different entry modes. Moreover, it identifies gaps in the literature and highlights some research questions based on the framework provided.


Foreign entry mode Establishment mode Family firms Transaction cost Resource-based view 


  1. Abdellatif, M., Amann, B., & Jaussaud, J. (2010). Family versus nonfamily business: A comparison of international strategies. Journal of Family Business Strategy, 1(2), 108–116.CrossRefGoogle Scholar
  2. Aguilera, R. V., Marano, V., & Haxhi, I. (2019). International corporate governance: A review and opportunities for future research. Journal of International Business Studies, 50(4), 457–498.CrossRefGoogle Scholar
  3. Anderson, E., & Gatignon, H. (1986). Modes of foreign entry: A transaction cost analysis and propositions. Journal of International Business Studies, 17(3), 1–26.CrossRefGoogle Scholar
  4. Anderson, R. C., & Reeb, D. M. (2003). Founding-family ownership, corporate diversification, and firm leverage. Journal of Law and Economics, 46(2), 653–684.CrossRefGoogle Scholar
  5. Ang, S. H., Benischke, M. H., & Doh, J. P. (2015). The interactions of institutions on foreign market entry mode. Strategic Management Journal, 36(10), 1536–1553.CrossRefGoogle Scholar
  6. Arregle, J.-L., Duran, P., Hitt, M. A., & van Essen, M. (2017). Why is family firms’ internationalization unique? A meta-analysis. Entrepreneurship: Theory and Practice, 41(5), 801–831.Google Scholar
  7. 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.Google Scholar
  8. Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.CrossRefGoogle Scholar
  9. Barney, J. B. (2001). Is the resource-based “view” a useful perspective for strategic management research? Yes. Academy of Management Review, 26(1), 41–56.Google Scholar
  10. Berrone, P., Cruz, C., & Gomez-Mejia, L. R. (2012). Socioemotional wealth in family firms: Theoretical dimensions, assessment approaches, and agenda for future research. Family Business Review, 25(3), 258–279.Google Scholar
  11. Bhaumik, S., Dimova, R., Burkart, M., Panunzi, F. S., & Shleifer, A. (2014). Family firms. How Family Firms Differ, 58(5), 2167–2201.Google Scholar
  12. Bird, B., Welsch, H., Astrachan, J. H., & Pistrui, D. (2002). Family business research: The evolution of an academic field. Family Business Review, 15(4), 337–350.CrossRefGoogle Scholar
  13. 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.CrossRefGoogle Scholar
  14. Brouthers, K. D. (2013). Institutional, cultural and transaction cost influences on entry mode choice and performance. Journal of International Business Studies, 44(1), 14–22.CrossRefGoogle Scholar
  15. Brouthers, K. D., Brouthers, L. E., & Werner, S. (2008). Resource-based advantages in an international context. Journal of Management, 34(2), 189–217.CrossRefGoogle Scholar
  16. Cacciotti, G., & Hayton, J. C. (2015). Fear and entrepreneurship: A review and research agenda. International Journal of Management Reviews, 17(2), 165–190.CrossRefGoogle Scholar
  17. Calabrò, A., Torchia, M., Pukall, T. J., & Mussolino, D. (2013). The influence of ownership structure and board strategic involvement on international sales: The moderating effect of family involvement. International Business Review, 22(3), 509–523.CrossRefGoogle Scholar
  18. Carney, M. (2005). Corporate governance and competitive advantage in family-controlled firms. Entrepreneurship Theory and Practice, 29(3), 249–265.CrossRefGoogle Scholar
  19. Carr, C., & Bateman, S. (2009). International strategy configurations of the world’s top family firms. Management International Review, 49(6), 733–758.CrossRefGoogle Scholar
  20. Casillas, J. C., & Acedo, F. J. (2005). Internationalisation of Spanish family SMEs: An analysis of family involvement. International Journal of Globalisation and Small Business, 1(2), 134–151.CrossRefGoogle Scholar
  21. 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.CrossRefGoogle Scholar
  22. Chen, S.-F., & Hennart, J.-F. (2002). Japanese investors’ choice of joint ventures versus wholly-owned subsidiaries in the US: The role of market barriers and firm capabilities. Journal of International Business Studies, 33(1), 1–18.CrossRefGoogle Scholar
  23. Chrisman, J. J., Chua, J. H., & Sharma, P. (2005). Trends and directions in the development of a strategic management theory of the family firm. Entrepreneurship Theory and Practice, 29(5), 555–575.CrossRefGoogle Scholar
  24. Chrisman, J. J., Chua, J. H., & Steier, L. (2005). Sources and consequences of distinctive familiness: An introduction. Entrepreneurship Theory and Practice, 29(3), 237–247.CrossRefGoogle Scholar
  25. Chua, J. H., Chrisman, J. J., & Sharma, P. (1999). Defining the family business by behavior. Entrepreneurship: Theory & Practice Summer99, 23(4), 19.Google Scholar
  26. 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.CrossRefGoogle Scholar
  27. Claver, E., Rienda, L., & Quer, D. (2009). Family firms’ international commitment. Family Business Review, 2009(2), 125–135.CrossRefGoogle Scholar
  28. Colli, A. (2003). The History of Family Business, 1850–2000. Cambridge: Cambridge University Press.Google Scholar
  29. Datta, D. K., Musteen, M., & Herrmann, P. (2009). Board characteristics, managerial incentives, and the choice between foreign acquisitions and international joint ventures. Journal of Management, 35(4), 928–953.CrossRefGoogle Scholar
  30. 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.CrossRefGoogle Scholar
  31. Delios, A., & Henisz, W. J. (2003). Policy uncertainty and the sequence of entry by Japanese firms. Journal of International Business Studies, 34(3), 227–241.CrossRefGoogle Scholar
  32. Dyer, W. G. (2006). Examining the “family effect” on firm performance. Family Business Review, 19(4), 253–273.CrossRefGoogle Scholar
  33. Faccio, M., & Lang, L. H. P. (2002). The ultimate ownership of Western European corporations. Journal of Financial Economics, 65(3), 365–395.CrossRefGoogle Scholar
  34. Family Firm Institute. (2017). Global data points.Google Scholar
  35. 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.CrossRefGoogle Scholar
  36. 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, & Organization, 4(2), 305–336.Google Scholar
  37. Gedajlovic, E. R., & Carney, M. (2010). Markets, hierarchies, and families: Toward a transaction cost theory of the family firm. Entrepreneurship: Theory and Practice, 34(6), 1145–1172.Google Scholar
  38. Gomez-Mejia, L. R., Cruz, C., Berrone, P., & De Castro, J. (2011). The bind that ties: Socioemotional wealth preservation in family firms. The Academy of Management Annals, 5(1), 37–41.CrossRefGoogle Scholar
  39. Gomez-Mejia, L. R., Haynes, K. T., Nunez-Nickel, M., Jacobson, K. J. L., & 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.CrossRefGoogle Scholar
  40. González, M., Guzmán, A., Pombo, C., & Trujillo, M.-A. (2013). Family firms and debt: Risk aversion versus risk of losing control. Journal of Business Research, 66(11), 2308–2320.CrossRefGoogle Scholar
  41. Graves, C., & Thomas, J. (2006). Internationalization of Australian family businesses: A managerial capabilities perspective. Family Business Review, 19(3), 207–224.CrossRefGoogle Scholar
  42. Habbershon, T. G. (2006). Commentary: A framework for managing the familiness and agency advantages in family firms. Entrepreneurship Theory and Practice, 30(6), 879–886.CrossRefGoogle Scholar
  43. Habbershon, T. G., Williams, M., & MacMillan, I. C. (2003). A unified systems perspective of family firm performance. Journal of Business Venturing, 18(4), 451–465.CrossRefGoogle Scholar
  44. 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.CrossRefGoogle Scholar
  45. Hennart, J.-F. (1982). A theory of multinational enterprise. University of Michigan Press.Google Scholar
  46. Hennart, J.-F. (2009). Down with MNE-centric theories! market entry and expansion as the bundling of MNE and local assets. Journal of International Business Studies, 40(9), 1432–1454.CrossRefGoogle Scholar
  47. Hennart, J.-F., Sheng, H. H., & Pimenta, G. (2015). Local complementary inputs as drivers of entry mode choices: The case of US investments in Brazil. International Business Review, 24(3), 466–475.CrossRefGoogle Scholar
  48. Hill, C. W. L., Hwang, P., & Kim, W. C. (1990). An eclectic theory of the choice of international entry mode. Strategic Management Journal, 11(2), 117–128.CrossRefGoogle Scholar
  49. Kano, L., & Verbeke, A. (2018). Family firm internationalization: Heritage assets and the impact of bifurcation bias. Global Strategy Journal, 8(1), 158–183.CrossRefGoogle Scholar
  50. Kaufmann, D., Kraay, A., & Mastruzzi, M. (2004). Governance matters III: Governance indicators for 1996, 1998, 2000, and 2002. World Bank Economic Review, 18(2), 253–287.CrossRefGoogle Scholar
  51. Kontinen, T., & Ojala, A. (2010). The internationalization of family businesses: A review of extant research. Journal of Family Business Strategy, 1(2), 97–107.CrossRefGoogle Scholar
  52. 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.CrossRefGoogle Scholar
  53. Lai, J.-H., Chen, L.-Y., & Chang, S.-C. (2012). The board mechanism and entry mode choice. Journal of International Management, 18(4), 379–392.CrossRefGoogle Scholar
  54. 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.CrossRefGoogle Scholar
  55. Lin, W.-T. (2012). Family ownership and internationalization processes: Internationalization pace, internationalization scope, and internationalization rhythm. European Management Journal, 30(1), 47–56.CrossRefGoogle Scholar
  56. Majocchi, A., D’Angelo, A., Forlani, E., & Buck, T. (2018). Bifurcation bias and exporting: Can foreign work experience be an answer? Insight from European family SMEs. Journal of World Business, 53(2), 237–247.CrossRefGoogle Scholar
  57. Makino, S., & Neupert, K. E. E. (2000). National Culture, transaction costs, and the choice between joint venture and wholly owned subsidiary. Journal of International Business Studies, 31(4), 705–713.CrossRefGoogle Scholar
  58. Matta, E., & Beamish, P. W. (2008). The accentuated CEO career horizon problem: Evidence from international acquisitions. Strategic Management Journal, 29(7), 683–700.CrossRefGoogle Scholar
  59. Memili, E., Misra, K., Chrisman, J. J., & Welsh, D. H. B. (2017). Internationalisation of publicly traded family firms: A transaction cost theory perspective and longitudinal analysis. International Journal of Management and Enterprise Development, 16(1–2), 80–108.CrossRefGoogle Scholar
  60. Metsola, J., Leppäaho, T., Paavilainen-Mäntymäki, E., & Plakoyiannaki, E. (2020). Process in family business internationalisation: The state of the art and ways forward. International Business Review, 29(2), 101665.CrossRefGoogle Scholar
  61. Meyer, K. E., Estrin, S., Bhaumik, S. K., & Peng, M. W. (2009). Institutions, resources, and entry strategies in emerging economies. Strategic Management Journal, 30(1), 61–80.CrossRefGoogle Scholar
  62. Miller, D., Minichilli, A., & Corbetta, G. (2013). Is family leadership always beneficial? Strategic Management Journal, 34(5), 553–571.CrossRefGoogle Scholar
  63. Molly, V., Laveren, E., & Deloof, M. (2010). Family Business Succession and Its Impact on Financial Structure and Performance. Family Business Review, 23(2): 131–147.Google Scholar
  64. 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.CrossRefGoogle Scholar
  65. Mutinelli, M., & Piscitello, L. (1998). The entry mode choice of MNEs: An evolutionary approach. Research Policy, 27(5), 491–506.CrossRefGoogle Scholar
  66. Naldi, L., Nordqvist, M., Sjöberg, K., & Wiklund, J. (2007). Entrepreneurial orientation, risk taking, and performance in family firms. Family Business Review, 20(1), 33–47.CrossRefGoogle Scholar
  67. Oesterle, M.-J., Richta, H. N., & Fisch, J. H. (2013). The influence of ownership structure on internationalization. International Business Review, 22(1), 187–201.CrossRefGoogle Scholar
  68. 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, 47(3), 787–801.CrossRefGoogle Scholar
  69. Pukall, T. J., & Calabrò, A. (2014). The internationalization of family firms: A critical review and integrative model. Family Business Review, 27(2), 103–125.CrossRefGoogle Scholar
  70. Rugman, A. M., & Verbeke, A. (1992). A note on the transnational solution and the transaction cost theory of multinational strategic management. Journal of International Business Studies, 23(4), 761–771.CrossRefGoogle Scholar
  71. Sanders, W. M. G., & Carpenter, M. A. (2015). Internationalization and firm governance: The roles of CEO compensation, top team composition. and board structure. Academy of Management Journal, 41(2), 158–178.Google Scholar
  72. Sciascia, S., Mazzola, P., Astrachan, J. H., & Pieper, T. M. (2012). The role of family ownership in international entrepreneurship: Exploring nonlinear effects. Small Business Economics, 38(1), 15–31.CrossRefGoogle Scholar
  73. Sestu, M. C., D’Angelo, A., & Majocchi, A. (2020). No Title. European Journal of International Management.Google Scholar
  74. Sestu, M. C., & Majocchi, A. (2020). Family firms and the choice between wholly owned subsidiaries and joint ventures: A transaction costs perspective. Entrepreneurship Theory and Practice, 44(2), 211–232.CrossRefGoogle Scholar
  75. Shaver, J. M. (2013). Do we really need more entry mode studies? Journal of International Business Studies, 44(1), 23–27.CrossRefGoogle Scholar
  76. Shleifer, A., & Vishny, R. W. (2007). A survey of corporate governance. Corporate Governance and Corporate Finance: A European Perspective, LII(2), 52–90.Google Scholar
  77. Slangen, A. H. L., & van Tulder, R. J. M. (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.CrossRefGoogle Scholar
  78. Surdu, I., Mellahi, K., & Glaister, K. W. (2019). Once bitten, not necessarily shy? Determinants of foreign market re-entry commitment strategies. Journal of International Business Studies, 50(3), 393–422.CrossRefGoogle Scholar
  79. Verbeke, A., & Kano, L. (2010). Transaction cost economics (TCE) and the family firm. Entrepreneurship Theory and Practice, 34(6), 1173–1182.CrossRefGoogle Scholar
  80. Verbeke, A., & Kano, L. (2012). The transaction cost economics theory of the family firm: Family-based human asset specificity and the bifurcation Bias. Entrepreneurship: Theory and Practice, 36(6), 1183–1205.Google Scholar
  81. Verbeke, A., Yuan, W., & Kano, L. (2019). A values-based analysis of bifurcation bias and its impact on family firm internationalization. Asia Pacific Journal of Management, 37, 449–477.CrossRefGoogle Scholar
  82. Williamson, O. E. (1979). Transaction-cost economics: The governance of contractual relations. Journal of Law and Economics, 22(2), 233–261.CrossRefGoogle Scholar
  83. Williamson, O. E. (1985). The economic institutions of capitalism: Firms, markets, relational contracting. Free Press.Google Scholar
  84. Xu, K., Hitt, M. A., & Miller, S. R. (2020). The ownership structure contingency in the sequential international entry mode decision process: Family owners and institutional investors in family-dominant versus family-influenced firms. Journal of International Business Studies, 51(2), 151–171.CrossRefGoogle Scholar
  85. Zahra, S. A. (2003). International expansion of U.S. manufacturing family businesses: The effect of ownership and involvement. Journal of Business Venturing, 18(4), 495–512.CrossRefGoogle Scholar
  86. Zahra, S. A. (2005). Entrepreneurial risk taking in family firms. Family Business Review, 18(1), 23–40.CrossRefGoogle Scholar
  87. Zahra, S. A., Hayton, J. C., & Salvato, C. (2004). Entrepreneurship in family vs. non-family firms: A resource-based analysis of the effect of organizational culture. Entrepreneurship Theory and Practice, 28(4), 363–381.CrossRefGoogle Scholar
  88. Zahra, S. A., Neubaum, D. O., & Larraneta, B. (2007). Knowledge sharing and technological capabilities: The moderating role of family involvement. Journal of Business Research, 60(10), 1070–1079.CrossRefGoogle Scholar
  89. Zellweger, T. M., Kellermanns, F. W., Chrisman, J. J., & Chua, J. H. (2012). Family control and family firm valuation by family CEOs: The importance of intentions for transgenerational control. Organization Science, 23(3), 851–868.CrossRefGoogle Scholar
  90. 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.CrossRefGoogle Scholar

Copyright information

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021

Authors and Affiliations

  1. 1.Department of Global Economics and ManagementUniversity of GroningenGroningenNetherlands

Personalised recommendations