The purpose of this paper is to ascertain the impact of family ownership on the entrepreneurial orientation (EO) of firms in an emerging market and the contingencies under which it is likely to be affected.
The paper adopted a panel data multiple regression using ordinary least square methodology on a sample of 51,972 observations belonging to 12,250 firms from India.
The study finds that family businesses have higher EO than non-family firms. However, it is likely to be affected during institutional transition due to environmental uncertainty. Furthermore, during institutional transition, there will be differences in the EO of family business groups and stand-alone family firms due to the former’s ubiquitous network-level resource advantages.
This paper contributes to the literature on family business by reconciling the positive and negative views on the effect of family ownership on EO by arguing that the risk-taking behavior of family firms is contingent on the environmental conditions and the resource position of the firm.
This study will enable managers and other stakeholders to predict the entrepreneurial attitude of family-owned firms during environmentally stable as well as turbulent times.
This study highlights the implication of institutional transition through reforms on a vital part of the economy. Policy makers have to be sensitive to repercussions on family business due to environmental turbulence.
This is one of the first papers that investigate the influence of institutional transition and the resource position of Indian family firms on their EO.
