The impact of family ownership on establishment and ownership modes in foreign direct investment: The moderating role of corruption in host countries
研究了家族所有权如何影响企业对外直接投资时选择绿地投资和全资所有权，以及东道国腐败如何强化这一倾向，对家族企业管理者有参考价值。
Research Summary: In this study, we adopt a socioemotional wealth perspective to examine the influence of family ownership on foreign direct investment. When establishing foreign subsidiaries, firms with greater degrees of family ownership are more likely to engage in greenfield investment and full equity ownership in order to maintain family owners’ socioemotional wealth. Additionally, these relationships are more pronounced in countries with higher levels of corruption. In corrupt countries, greater control over foreign subsidiaries is necessary to restrict their corrupt behaviors, which can seriously damage the firm’s socioemotional wealth and destroy the reputation of the family owners. By using a dataset of foreign market entries by Japanese listed firms in the electronic machinery industry, we find general support for our hypotheses. Managerial Summary: We find evidence that Japanese listed electronic machinery manufacturers with larger family ownership are more likely to choose greenfield investment and full ownership when entering foreign countries. This result suggests that family owners prefer to maintain strong control on local subsidiaries, possibly for preserving their socioemotional wealth. Additionally, this tendency of family firms’ regarding the choice of greenfield investment is stronger when they enter countries with higher levels of corruption. Managers and investors of family firms might need to pay attention to family owners’ entry mode choices, which could be incentivized excessively for the preservation of socioemotional wealth, possibly at the expense of economic wealth.