Family firms and the mixed gamble perspective in cross-border acquisitions: A study of Indian firms

• 
  By Vinod Thakur
  Assistant Professor

  Co-Authors
  Mohammad Fuad, A. R. Sanchez, Jr. School Of Business, Texas A&M International University, USA
  Chinmay Pattnaik, Discipline Of International Business, The University Of Sydney Business School, Australia
  Rajesh Jain, Strategy And Entrepreneurship Area, Indian Institute Of Management Ranchi, India
  

  Journal : International Business Review
  Publisher : Elsevier

Article citation: Fuad, M., Thakur, V., Pattnaik, C., & Jain, R. (2024). Family firms and the mixed gamble perspective in cross-border acquisitions: A study of Indian firms. International Business Review, 33(1), 102205.

Abstract

Family firms tend to have ownership concentrated in the hands of family members, which influences their internationalization decisions. We draw on the mixed gamble perspective and theorize that family firms trade off socioemotional wealth (SEW) losses in favor of potential gains while seeking equity in cross-border acquisitions (CBAs). We hypothesize that the degree of family ownership is positively related to the level of equity sought in CBAs. Furthermore, family management reinforces the preference of family owners toward SEW gains, thereby strengthening the relationship between the degree of family ownership and equity sought in CBAs. However, institutional distance increases the risk of CBA failure and negatively moderates the relationship. Our findings, based on a sample of 433 CBAs conducted by Indian family firms, contribute to the mixed gamble perspective.