Preferential hiring of relatives and family SMEs' internationalisation

Abstract

[EN] A well-established argument in the family business literature is that the pursuit of noneconomic goals has a remarkable impact on family firms’ strategic decisions, and particularly on their international expansion intentions. But scant research explores how family goals affect family firms’ internationalization. Using survey and archival data on a sample of 1,201 Spanish family SMEs, we show that altruism-induced preferences —as captured by the adoption of the preferential hiring of relatives (PHR) as a primary goal— significantly reduces foreign sales intensity and limits family business operations to their local regions. Furthermore, we find that the external threat of local unemployment exacerbates the negative effect of selecting PHR as a priority on export intensity. Our findings extend previous research on the internationalization of family firms by highlighting the potentially adverse consequences of prioritizing noneconomic goals and how the firm’s environment may interact with such goals to accentuate or impede SMEs’ internationalization.