Socioemotional Wealth as a Mixed Gamble: Revisiting Family Firm R&D Investments With the Behavioral Agency Model

Luis R. Gomez-Mejia, Joanna Tochman Campbell, Geoffrey Martin, Robert E. Hoskisson, Marianna Makri, David G. Sirmon

Research output: Contribution to journalArticle

161 Scopus citations

Abstract

Theoretical explanations for family firm underinvestment in R&D relative to nonfamily firms remain nascent. We revisit this question using a refinement to the behavioral agency model (BAM)-the mixed gamble-that allows us to examine the socioemotional trade-offs that R&D represents for the family firm and how this differentiates their R&D investment decision from nonfamily firms. We do so in an empirical context where R&D investment is of greatest importance-high-technology industries. Moreover, we examine three contingencies that allow us to explore heterogeneity across family firms in their R&D decisions due to their effect upon the family's socioemotional wealth mixed gamble: institutional investor ownership, related diversification, and performance hazard.

Original languageEnglish (US)
Pages (from-to)1351-1374
Number of pages24
JournalEntrepreneurship: Theory and Practice
Volume38
Issue number6
DOIs
StatePublished - Nov 1 2014

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics

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