The purpose of this paper is to offer an institutional perspective of the Martin and Gomez-Mejia model. Specifically, this paper offers arguments of how institutions moderate the socioemotional wealth (SEW) and financial performance relationship.
This is an individual commentary that explores country-level institutional contingencies that affect the predicted effect of SEW dimensions upon financial performance offered by Martin and Gomez-Mejia.
The paper offers arguments of how both formal and informal institutions, such as the legal protection of minority shareholders, labor and investors; freedom of expression and information; and the country’s culture, exacerbate or ameliorate the predicted effect of the five SEW dimensions upon financial performance.
By exploring an institutional perspective of the socioemotional and financial wealth relationship, this commentary offers additional boundary conditions to those offered by Martin and Gomez-Mejia to further refine their theory.
