Performance of Foreign Subsidiaries Acquired by Family Firms: A Configurational Perspective

Abstract Although international business research has extensively focused on foreign subsidiary performance, the performance of foreign subsidiaries owned by “family firms” has surprisingly received scant attention. In this paper, we adopt a configurational perspective to explore the diverse combinations of external family-centric institutions and internal firm-specific factors that drive the performance of family firms’ acquired foreign subsidiaries. Such configurations include the combination of (1) family business legitimacy (FBL) within the host country of the foreign subsidiary, (2) FBL of the family firm’s home country, (3) the presence of a family CEO in the parent firm, (4) the proportion of family members on the board of directors, and (5) name congruence. By applying fuzzy-set qualitative comparative analysis (fs/QCA) to a sample of 87 foreign subsidiaries acquired by 56 family firms over the period 2011–2019, our findings show optimal configurations of the aforesaid factors that lead to the successful performance of family firms’ acquired foreign subsidiaries.