Handbook of Research on Family Business, Second Edition
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Handbook of Research on Family Business, Second Edition

Edited by Kosmas X. Smyrnios, Panikkos Z. Poutziouris and Sanjay Goel

During the previous decade, the multi-disciplinary field of family business has advanced significantly in terms of advances in theory, development of sophisticated empirical instruments, systematic measurement of family business activity, use of alternative research methodologies and deployment of robust tools of analysis. This second edition of the Handbook of Research on Family Business presents important research and conceptual developments across a broad range of topics. The contributors – notable researchers in the field – explore the frontiers of knowledge in family business entrepreneurship and stimulate critical thinking, enriching the repository of theoretical frameworks and methodologies.
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Chapter 30: Acquisition and diversification behaviour in large family firms

Alexandra Dawson and Giovanni Valentini


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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