Cultural imprinting and the liability of foreignness of family businesses

Purpose The paper aims to understand how family businesses of foreign origin manage the paradox between preserving the cultural legacy of the country of origin through the family and integrating into the culture of the country in which the company is present. Design/methodology/approach A sample of 490 small and medium-sized Spanish family businesses of Muslim, Chinese and local (Spanish) origin is studied, using nested ANOVA as the statistical analysis tool, with regression analysis for a robustness check. Findings The empirical analysis confirm that firms founded by foreign entrepreneurs tend to be smaller in terms of sales, assets, and number of employees than locally founded firms. This difference persists even into the second generation, suggesting that founding decisions leave a lasting imprint on organisational structure. Research limitations/implications The main limitation consists in the use of surnames as a proxy to identify cultural origin, which may not fully capture the complexity of founders’ identities. Practical implications The paper shows that foreign-origin firms tend to operate with more contained structures and conservative financial strategies can help design support policies better aligned with their needs. For institutional actors such as banks or development agencies, these findings may help refine evaluation and legitimisation criteria, reducing biases that penalise business models differing from the dominant one. Originality/value Our research extends the concept of liability of foreignness to the field of family firms, showing how it becomes an imprinting of liability insofar as the liabilities inherent to a foreign-origin firm persist over time.