Socio-emotional wealth and corporate responses to environmental hostility: Are family firms more stakeholder oriented?

Do family firms care more for different stakeholders than nonfamily firms when operating in a hostile business environment? This study addresses this question and fills the existing void in family business research. It shows that family-controlled firms adopt corporate social responsibility strategies and balance the demands of internal and external interest groups to preserve their socio-emotional wealth while facing fierce competition, resource scarcity, and penurious economic conditions. More specifically, our analysis of an international sample of 956 listed firms from 2006 to 2014 reveals that family firms show a higher level of corporate social responsibility (CSR) performance and better stakeholder orientation than nonfamily firms. Our findings are useful for managers, policymakers, and responsible investors.

Automated summary

This study examines whether family firms prioritize different stakeholders over nonfamily firms in hostile business environments. The research shows that family-controlled firms are more likely to adopt corporate social responsibility strategies to protect their socio-emotional wealth, and they outperform nonfamily firms in terms of CSR performance and stakeholder orientation. These findings are valuable for managers, policymakers, and conscientious investors.