Inclusivity, familiness and coopetition: embeddedness pathways to expansion in family cultural MSMEs

Purpose Family businesses in emerging economies often face challenges in achieving growth while preserving their cultural and ethnic identities. This study examines the influence of inclusivity on business expansion in family-owned micro-, small- and medium-sized enterprises (MSMEs) with cultural awareness, familiness and local coopetition as mediating factors. Design/methodology/approach A quantitative survey was conducted with 300 family entrepreneurs in North Sumatra, Indonesia, a region known for its diverse indigenous ethnic communities. The proposed model was analyzed using partial least squares structural equation modeling (PLS-SEM) to test the hypotheses. Findings Inclusivity enhances cultural awareness, which strengthens family business governance and identity as key dimensions of familiness. Cultural awareness mediates the relationship between inclusivity and familiness, whereas local coopetition, although not directly driven by governance or identity, significantly promotes business expansion. Practical implications Family companies and local governments should foster inclusivity and cultural awareness to support socioemotional wealth and adopt coopetition strategies for sustainable longevity. Social implications This study highlights the role of family firms as community anchors that support collaboration in multicultural settings. Thus, they can strengthen their social cohesion and preserve their local cultural values while pursuing economic growth. Originality/value This study extends the familiness theory by embedding inclusivity and cultural awareness as antecedents while clarifying the relational boundary conditions of coopetition in multiethnic family MSMEs.