# Internationalization of family firms on innovation: Moderating impact of socioemotional wealth and institutional environment

## TL;DR

This study explores how internationalization affects innovation in family firms, finding that depth and breadth of internationalization have opposite effects, influenced by family control and institutional environment.

## Contribution

The paper introduces the moderating roles of socioemotional wealth and institutional environment in the relationship between internationalization and innovation in family firms.

## Key findings

- Internationalization depth negatively affects family firm innovation, while breadth has a positive effect.
- High family control intensifies the negative impact of internationalization depth on innovation.
- A strong institutional environment enhances the positive relationship between internationalization and innovation.

## Abstract

Currently, there is a lack of research specifically investigating the influence of internationalization on the innovation of family firms. This paper aims to investigate the influence of both internationalization depth and breadth on the innovation of family firms. Additionally, it aims to analyze how socioemotional wealth (SEW) and regional institutional environment in the home country influence this relationship. To test the hypotheses, a questionnaire survey was carried out with a sample of 253 family firms situated in eight provinces or municipalities in China. The results are as follows: First, internationalization depth negatively influenced family firm innovation, whereas internationalization breadth positively influenced family firm innovation. Second, the negative influence of internationalization depth on innovation was pronounced at a high level of family control, whereas the positive influence of internationalization breadth on innovation was pronounced at a low level of transgenerational succession intention in family firms. Third, a well-developed institutional environment strengthened the relationship between internationalization and innovation in family firms. This research enriches the literature on internationalization and innovation in family firms, and offers useful insights for practitioners.