This study explains how small family firms build resilience during exogenous shocks. Grounded in dynamic capabilities theory and an institutional lens, we disaggregate familiness into family human capital (FHC) and family social capital (FSC), arguing they differ in activation logic and behavioral consequences. We test proactive pivoting strategy (PPS) as the enactment mechanism and examine how subsidies and policy stringency condition these effects.
We analyze data from 1,040 small family firms across 55 countries (STEP Project Global Consortium, 2020), estimating a moderated mediation model via OLS with bias-corrected bootstrapped indirect effects (5,000 resamples), country fixed effects, clustered standard errors and multilevel robustness checks.
Both FHC and FSC are positively associated with resilience. PPS partially mediates only the FHC pathway, revealing an asymmetry: FHC is directly actionable, while FSC requires institutional support to become adaptive. Subsidies show marginal associations with both pathways; policy stringency shows a tentative association with FHC only.
First, we disaggregate familiness, showing its dimensions operate through different mechanisms: one agentic and individually activatable, the other relational and institutionally contingent. Second, we position PPS as the behavioral enactment of dynamic capabilities, theorizing how path dependencies and socioemotional considerations shape its activation. Third, we reveal when institutional conditions are associated with social capital becoming linked to adaptive action. Practically, investing in family members' adaptive skills matters more for survival than relying on relational goodwill alone.
