Internationalisation of family businesses: The salience of personal and professional networks
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In the advent of globalisation, many firms, including those categorized as family businesses have intensified their global focus. Family businesses possess unique resources and capabilities that can be leveraged as they expand their reach across national borders. However, to date, limited research has examined factors that spur the internationalisation of family businesses. Prior studies have shown that formal market search activities are rarely used to identify opportunities and, consequently, have little bearing on the internationalisation behaviour of family businesses. Rather, networks are found to be the major source of awareness of foreign market opportunities for firms considering foreign market entry. Motivated by these findings, this study draws on network theory of internationalisation to develop testable propositions that introduce, (a) the different types of networks family businesses use to pursue an internationalisation strategy in comparison to non-family businesses, (b) whether the extensiveness of different networks influence the internationalisation of family businesses.
As prior network related investigations have not clarified the kinds of networks, family businesses use when venturing away from home, a gap in the literature exists that this research clearly addresses. Therefore, this study distinguishes personal and professional networks based on established literature. As such, this study proposes that family businesses rely less on network relationships and use to a greater proportion personal contacts for internationalisation than non-family businesses. The extant literature on networking has, in the main, highlighted both, positive and negative effects on the internationalisation of companies. However, it is not clear which effect networks have in the context of family businesses. This study proposes that networks generally have a positive effect on family business internationalisation, however this relationship is more pronounced in personal rather than professional networks.
This document has been peer reviewed.