Family firms and the mixed gamble perspective in cross-border acquisitions: A study of Indian firms

Abstract

Family firms tend to have ownership concentrated in the hands of family members, which influences their internationalization decisions. We draw on the mixed gamble perspective and theorize that family firms trade off socioemotional wealth (SEW) losses in favor of potential gains while seeking equity in cross-border acquisitions (CBAs). We hypothesize that the degree of family ownership is positively related to the level of equity sought in CBAs. Furthermore, family management reinforces the preference of family owners toward SEW gains, thereby strengthening the relationship between the degree of family ownership and equity sought in CBAs. However, institutional distance increases the risk of CBA failure and negatively moderates the relationship. Our findings, based on a sample of 433 CBAs conducted by Indian family firms, contribute to the mixed gamble perspective.