Family Firms, M&A Strategies, and M&A Performance: A Meta-Analysis

Abstract

Extant research has yielded conflicting theoretical and empirical predictions about whether family firm acquirers perform better or worse in mergers and acquisitions (M&As) than their nonfamily firm counterparts. To help resolve this controversy, we take a socioemotional wealth (SEW) perspective to theorize that family members’ desire to preserve their SEW favors the pursuit of M&A strategies that are both beneficial (industry-related M&As) and detrimental (domestic M&As) to M&A performance. We further theorize that the desire to preserve SEW leads to family firm idiosyncratic SEW resources that help family firm acquirers, on average, achieve better M&A performance than nonfamily firm acquirers. Meta-analytic results based on 51 primary studies covering 242,123 M&A deals are in line with our predictions. Thus, our study contributes to the literature on family firms and M&A performance by explaining how the different M&A strategies chosen by family firms have positive and negative consequences for M&A performance. Our theory and findings have implications for future family business and M&A research.