Narrow-Framing and Risk Preferences in Family and Non-Family Firms
Building upon prospect theory’s concept of narrow-framing, we explore family firms’ risk preferences across multiple decisions in corporate entrepreneurship. We argue that family firms’ decisions are less likely to be narrowly framed (more likely to be made as a group rather than in isolation) compared to non-family firms. Examining the interaction between two risky decisions (internationalization and R&D investment) in two samples of publicly traded firms in the USA and China confirms our hypotheses. Family firms appear more likely than non-family firms to diversify risk when making multiple decisions concerning corporate entrepreneurship. However, given inferior performance, risk taking across multiple decisions in family firms is positively related.
Fang, C., Memili, E., Chrisman, J. J., & Tang, L. (2021). Narrow-Framing and Risk Preferences in Family and Non-Family Firms. Journal of Management Studies, 58(1), pp. 201-235. John Wiley & Sons, Ltd.
The definitive version is available at https://doi.org/10.1111/joms.12671
Business and Information Technology
Keywords and Phrases
Corporate Entrepreneurship; Family Business; Narrow-Framing; Risk Management
International Standard Serial Number (ISSN)
Article - Journal
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01 Jan 2021