Socioemotional Wealth and Its Effect on Family Firm Performance

Abstract

Family firm is the oldest and the most prevalent type of business entity in the world. A unique feature that sets apart a family business from its non-family counterparts is the Socioemotional Wealth (SEW). Preservation of SEW among family firms is of paramount importance. Various strategic choices including need for innovation and internationalization are influenced by SEW. Studies also show that a family firm's SEW plays an influential role in the firm performance. The This chapter outlines the different scales used to measure SEW, checks the reliability and internal consistency of the existing REI scale in Indian context, investigates the heterogeneity of family firms and understands the effect of different SEW dimensions on firm performance. The findings reveal that SEW has a significant positive effect on firm performance. Contributions of the study and scope for future research are also discussed.