Descendant CEOs and cross-border acquisitions in family firms: The moderating role of family involvement

Research suggests that family firms exhibit substantial heterogeneity in their internationalization strategies, yet the role of descendant CEOs in shaping these decisions remains underexplored. Integrating the socioemotional wealth (SEW) perspective with the willingness and ability framework (WAF), we examine how family involvement influences the size of cross-border acquisitions (CBAs) in family firms. Using a panel of 370 publicly listed Indian family firms, we find that descendant CEOs exhibit a distinct strategic conservatism, opting for smaller CBAs compared to founder and outsider CEOs. This aversion to large CBAs is reinforced by higher family ownership and greater family board representation, which amplify SEW concerns. However, independent directors on the board mitigate this conservatism by encouraging larger CBAs. Our findings highlight the nuanced role of governance structures in shaping internationalization strategies, demonstrating that family firm heterogeneity, particularly differences in CEO type, ownership concentration, and board composition, significantly influences risk-taking in CBAs.