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The impact of board of directors’ characteristics on the internationalization of family SMEs
Deparment of Economics, European University of Rome, Via degli Aldobrandeschi, 190, Rome, 00163, Italy.
Department of Business and Management, LUISS University, Viale Romania 32, Rome, 00197, Italy.
Control, Audit, Risk Management and Entrepreneurship Department, University of Mons, Place Warocqué, 17, Mons, 7000, Belgium.
Jönköping University, Jönköping International Business School, JIBS, Centre for Family Entrepreneurship and Ownership (CeFEO). FABULA – Family Business Lab, Università Cattaneo - LIUC, Corso Matteotti 22, Castellanza, 21053, Italy.ORCID iD: 0000-0001-7065-0410
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2023 (English)In: Journal of World Business, ISSN 1090-9516, E-ISSN 1878-5573, Vol. 58, no 2, article id 101412Article in journal (Refereed) Published
Abstract [en]

Family small and medium-sized enterprises (SMEs) face both general bounded rationality challenges and a unique expression of bounded rationality in their internationalization process: the bifurcation bias, a concept aligned with modern transaction cost theory (TCT). We argue that efficient governance in family SMEs, and especially features of the Board of Directors’ composition, can help alleviate bounded rationality. Complementing TCT with upper echelons theory (UET), we investigate which Board characteristics in family SMEs contribute to efficient governance and the ensuing strategy decisions. We focus specifically on strategy decisions in the internationalization sphere. Our empirical analysis of survey data from 328 Belgian family SMEs, operating out of a small open economy, reveals that family SMEs internationalize more if their Boards are ‘open’, ‘inclusive’, ‘experienced’ and ‘active’. These Board characteristics, all reflective of efficient governance, i.e., providing the Board with the capacity to alleviate bounded rationality constraints, positively contribute to internationalization, especially (and perhaps paradoxically) when the family SME is managed by a CEO who is also a family member.

Place, publisher, year, edition, pages
Elsevier, 2023. Vol. 58, no 2, article id 101412
Keywords [en]
Bifurcation bias, Board of directors, Bounded rationality, Family firms, Internationalization, SMEs
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-59128DOI: 10.1016/j.jwb.2022.101412ISI: 001020979900001Scopus ID: 2-s2.0-85143074251OAI: oai:DiVA.org:hj-59128DiVA, id: diva2:1718197
Available from: 2022-12-12 Created: 2022-12-12 Last updated: 2024-09-04Bibliographically approved

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Sciascia, Salvatore

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