The role of founder CEO and independent board in family firms' international growth
Evidence from India and Italy
Bibliographic Data
| ID | 13021356 |
|---|---|
| Authors | Anita Kerai (Indian Institute of Management Kozhikode, corresponding author), Riccardo Marzano (0000-0003-4231-1192, Sapienza University of Rome), Lucia Piscitello (0000-0002-4817-315X, Politecnico di Milano), Chitra Singla (0000-0003-4666-1886, Indian Institute of Management Ahmedabad) |
| Year | 2023 |
| Volume | 30 |
| Issue | 4 |
| Pages | 704-732 |
| Publication date | 2023-08-02 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Cross Cultural & Strategic Management (JOURNAL) |
| Journal identifiers | ISSN: 2059-5794 • E-ISSN: 2059-5808 |
| Publisher | Emerald Publishing Limited (PUBLISHER • GB) |
| DOI | 10.1108/ccsm-08-2022-0139 |
| OpenAlex | W4385484021 |
| Language | EN |
| Citations received | 1 |
| References cited | 104 |
Purpose This paper investigates the role of the founder CEO and board independence in shaping the way in which Indian and Italian family firms (FFs) pursue international growth via two modes, that is exports and FDI. This article claims that country's context matters in determining the relationship between the presence of the founder CEO and FFs' extent of exports and extent of FDI. Further, this article examines the moderating role of board independence on the above-mentioned founder CEO–FF's international growth relationship. Design/methodology/approach Using a fixed-effect panel data method, this article tests the hypotheses on a sample of 1,275 Indian FF-year observations and 705 Italian FF-year observations over the period 2008–2015. Findings This article reveals that the presence of a founder CEO is positively associated with the extent of exports but negatively associated with the extent of FDI in Italian firms. However, in case of Indian firms, the presence of the founder CEO is negatively associated with the extent of exports as well as with the extent of FDI. This founder CEO's influence on the firm's international growth is mitigated by the presence of an independent board in Italian firms; however, this moderation is not significant in the case of Indian firms. Research limitations/implications It is important to capture heterogeneity within family firms and across institutional contexts while studying family firms' international growth. Further, it is important for international business scholars to theorize for different modes of international growth because challenges faced in expansion via exports are different from the challenges faced in expansion via FDI (foreign subsidiaries). Therefore, family firms leadership might prefer a certain mode of international growth. Practical implications The findings of the study imply that national culture and institutional context could play an important role in determining (a) Founder CEO's inclination towards FF's extent of exports and FDI as well as (b) the effectiveness of an independent board in mitigating founder CEO's influence on FF's international growth. Originality/value This work is one of the very few studies that examines the impact of FF's heterogeneity and country heterogeneity on two modes of international growth, namely exports and FDI, in the Indian and Italian contexts. Further, this work provides empirical evidence on the independent board's role in mitigating founder CEO's influence in decision making in the case of Italian firms. Extant literature expects an independent board to encourage FFs' international growth both via exports and FDI; this study shows that independent boards could reduce the founder CEO's inclination towards exports and mitigate founder CEO's influence on the decision making; however, this mitigation effect is highly context dependent
Business · Context (archaeology · Demographic economics · Econometrics · Economics · Foreign direct investment · Geography · Independence (probability theory · International business · International trade · Macroeconomics · Management · Moderation · Panel data · Sample (material · Corporate Finance and Governance · Family Business Performance and Succession · Psychology · Working Capital and Financial Performance
Entrepreneurial legacy
A Cultural Analysis of Paternalistic Leadership in Chinese Organizations
Culture and Organizations
The internationalization and performance of SMEs
Socioemotional Wealth in Family Firms
Family firm internationalization
Family and state ownership, internationalization and corporate board-gender diversity
Helping the family’
A Transaction Cost Theory of Politics
The New Institutional Economics
The Iron Cage Revisited
Institutions
| Citations per year | 1 |
|---|---|
| Citation span | 2025 - 2025 (1) |
| Highly cited | No |