Family ownership and institutional voids: evidence from SMEs in Egypt

Purpose Drawing on institutional theory and the institutional voids perspective, this study aims to examine how family ownership enables small and medium-sized enterprises (SMEs) in Egypt to navigate weak formal institutions and pursue growth. Design/methodology/approach The authors conducted a multi-case qualitative study of five Egyptian family-owned SMEs using in-depth interviews. The authors’ analysis follows the Gioia methodology and an interpretive sensemaking approach to identify the mechanisms used to cope with institutional voids. Findings The authors identified three interrelated characteristics that enable family-owned SMEs to respond to institutional voids: long-term orientation, trust and loyalty and organizational agility. These identity-based capabilities help firms internalize key market functions, leverage social and political networks and adapt quickly to uncertainty. Importantly, the authors find that family firms use internationalization as a strategic means of institutional escapism, expanding abroad to avoid the constraints of Egypt’s weak institutional environment. Originality/value The authors contribute to research on institutional voids by framing family ownership as a bundled, multi-dimensional coping mechanism. The authors also extend literature on internationalization by highlighting escape logic as a strategic driver for family-owned SMEs. Contextually, this study addresses a gap in emerging market research by focusing on Egypt, a highly collectivist and underexplored institutional context in an emerging market.