Socioemotional Wealth, Ambidexterity, and Family Firm Performance: An Empirical Study

While family business literature agrees that family firms are driven by both non-economic and financial motives, it is unclear how the prioritization of socioemotional wealth (SEW) over financial considerations affects family firms' financial performance. Based on a sample of 343 family firm owners from German-speaking Europe, this study reveals a significant and positive relationship between the firm owners' SEW considerations and their family businesses' financial performance. This relationship, in turn, is found to be mediated by organizational ambidexterity. A fine-grained analysis of the different SEW dimensions indicates that this pattern may be driven by two elements of socioemotional wealth only (family members' identification with the firm and emotional attachment). Our findings demonstrate that business families do not necessarily face a trade-off when prioritizing the preservation of their SEW over stabilizing or improving the financial performance of their business. The study enriches several streams of literature and opens up numerous avenues for future research.