The influence of socioemotional wealth on firm financial performance: evidence from small and medium privately held family businesses

Abstract

By integrating literature on firm performance, family firms and socioemotional wealth (SEW), this paper empirically analyses how different SEW dimensions influence firm performance in privately held family businesses. The findings from a population of 173 family firms reveal that two SEW dimensions, i.e. identification of family members with the firm and renewal of family bonds through dynastic succession, exert a negative and significant impact on financial performance. Therefore, this study provides a better comprehension of the relationship between family involvement and financial performance and complements the partial view offered up until now, by introducing the SEW approach, its multidimensional nature and the effects of its various dimensions.