Abstract
Globalization is pressured by bilateral frictions. Recognizing the complex nexus of drivers for foreign market exit decisions of family firms, this study investigates how bilateral frictions and institutional logics function in such decisions. Building on intergroup relations theory and the institutional logics perspective, and using a sample of 1252 foreign subsidiaries established by 297 Chinese family firms in 2008-2017, we find that value-based friction reduces foreign market exit, while historical military friction leads to higher foreign market exit by family firms. The positive impact of historical military friction on exit is also mitigated by a high state logic, while the negative impact of value-based friction on exit is reinforced by high state and family logics. The conceptual work and empirical results of this study prompt future studies to further explore the challenges for family firms’ globalization and their exit strategies.
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