Family Firms’ Internationalization Market Entry: Small and Speedy – or Chary?

Abstract

Our empirical study among 112 German firms researches in as far psychic distance, cultural distance, and relative perceived performance impact the speed of internationalization among family firms vs. non-family firms. Results from partial least squares structural equation modeling show that family firms internationalize significantly slower than non-family firms and psychic distance is a distinct internationalization barrier for family firms. According to our results the level of perceived performance in relation to competitors acts as a motivating force until a saturation effect occurs. Hence, firms with a medium level of relative perceived performance approach international markets most proactively. We contribute to the International Entrepreneurship literature with its rich tradition in the resource based view by focusing on perceptions of the decision maker in family vs. non-family firms offering a nuanced perspective on internationalization speed. The observed effects of perceived psychic distance and relative perceived performance indicate that actors’ subjective reality impacts the proactiveness of international market entry. Thus, decision makers opt for managing risks differently that come along with the internationalization process and the necessity of speed cannot be stereotyped.