Political ideologies and internationalization of family firms in emerging markets: : The Case of Chile

Abstract

This paper examines the effect of government political ideology on internationalization of family-controlled firms (FCFs). FCFs tend to internationalize less than non-FCFs, because of their loss aversion and conservative concerns about maintaining the family’s socioemotional wealth (SEW). We propose that FCFs’ concerns related to internationalization are alleviated when the ideology of government (i.e., the set of values about society's goals) are aligned with FCFs' non-economic objectives (e.g., protecting SEW). Governments that subscribe to socially conservative and family-oriented ideology are viewed as particularly supportive of FCFs, which makes family owners feel safe and protected and more open to venturing into internationalization.