The Nexus Between Religiosity and Socioemotional Wealth in Family Firms’ Mergers and Acquisitions Decisions

This study examines how religiosity influences managerial decision-making in family firms under the consideration of socioemotional wealth. Through qualitative research on mergers and acquisitions (M&A) decisions, we examine the dynamics of 21 family firms in Germany, Austria, and Switzerland. The study reveals distinct differences between secular and religious family firms with regard to the underlying decision mechanisms and associated M&A outcomes. Specifically, we show that religious family firms demonstrate heightened loss aversion, prioritizing immediate socioemotional wealth losses over potential future gains, which makes them more cautious about pursuing M&A and diversification. Additionally, ethical and moral considerations rooted in Christian ethics lead religious family firms to emphasize societal (non-self-serving) interests (e.g., prioritizing employee well-being and excluding unethical targets), surpassing self-interested financial and socioemotional wealth objectives. These findings offer nuanced insights into the decision-making processes of religious family firm actors, while also advancing the understanding of the socioemotional wealth concept.