Edited by Kosmas X. Smyrnios, Panikkos Z. Poutziouris and Sanjay Goel
Chapter 30: Acquisition and diversification behaviour in large family firms
In this chapter we focus on the acquisition and diversification behaviour of large family firms. A number of conceptual and empirical articles have been written on this topic; however, they have reached contrasting conclusions. For example, Miller et al. (2010) focused on the scale (volume) and scope (diversification) of acquisitions by family firms and found that they acquire less and diversify more than non-family firms. Miller et al. (2010) explained these results by taking into account family firms’ business and portfolio risk preferences. However, other studies have reached different conclusions. For example, Gómez-Mejía et al. (2010) concluded that on average family firms diversify less than nonfamily firms in order to preserve the affect-related value of the firm or socio-emotional wealth. Based on a sample of 100 of the largest Italian firms, 38 of which are family firms, we find that being a family firm does not affect acquisition propensity, but that this behaviour is linked to other variables such as being public, more profitable, and larger. This finding differs from prior studies (e.g. Miller et al., 2010), most of which have found that family firms acquire less than non-family firms.
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