Intergenerational Capital Endowments and External Funding in New Ventures: A Fuzzy-Set Qualitative Comparative Analysis

Chenguang Hu, Peng Wang, and Jeffrey G. Covin

Abstract
Failure to attract external financing is a common puzzle for start-up firms and often leads to the use of entrepreneurs’ personal funding, typically with the help of their family. With little entrepreneurial experience, nascent entrepreneurs will have no factual signals to show external investors, except their characteristics or those of their family. The literature mainly focuses on the net effects of entrepreneurs’ personal capital endowments in isolation on start-up capital structure despite emerging appreciation of the importance of family-related factors. However, little is known about which combinations of capital endowments across capital dimensions (i.e., human, social, and financial capital) or generations (i.e., parent and child) will likely affect the level of external funding. Drawing on signaling theory, we adopt a configurational approach to examine the compositions of intergenerational capital endowments that are sufficient to shape external funding. Conducting a fuzzy-set qualitative comparative analysis of Chinese privately owned enterprises of nascent entrepreneurs, we identify four typical family prototypes that feature intergenerational capital endowments for low external funding. Findings highlight the significance of family dynamics in China and their role in shaping new venture financing by displaying intergenerational signals.

Keywords
external funding， family dynamics， intergenerational capital configurations， new ventures， qualitative comparative analysis

Institutional Origin and Chinese Family Firms’ Dot Tax Haven Internationalization

Ke Gong, Dustin Odom, and Taewoo Kim

Abstract
This study investigates how institutional origin affects the dot tax haven (DTH) internationalization of Chinese family firms (FFs). Drawing on institutional theory and the mixed gamble perspective, we propose that restructured FFs (RFFs), originating from state-owned enterprises (SOEs), are more likely to engage in DTH internationalization than entrepreneurial FFs directly established by family founders. This propensity is attributed to the institutional legacies inherited from their SOE predecessors, which create a distinct potential gain-loss calculus. Our empirical analysis of publicly listed Chinese FFs from 2012 to 2021 demonstrates that restructured FFs are 30% more likely to use DTH and establish 43% more DTH subsidiaries than entrepreneurial FFs. This tendency, however, is mitigated by the firms’ economic ties to financial institutions. Our study enhances understanding of FFs’ global entrepreneurial decision-making, contributing to FF heterogeneity research. A novel aspect of our study is examining the impact of institutional legacies on FFs – a topic less explored in family business literature. Furthermore, our findings provide insights for policymakers and regulators, emphasizing the importance of tailored policies that consider the intricate interplay between institutional origin and contemporary entrepreneurial goals in FFs.

Keywords
dot tax haven，family business，institutional origin，institutional theory，mixed gamble

When Do Family Firms Plant Different New Trees? The Role of Family Firms and CSR Committees in Green Innovation

Chia-Ling Lee, Wen-Ting Lin, and Ya-Nan Shih

Abstract
The operating goals of family firms (FFs) typically include building both economic and socioemotional wealth. Innovation is increasingly recognized as a key source for the development and growth of family firms. From the multiple dimensions of socioemotional wealth (SEW), this research has focused on how family influences a particular type of innovation – green innovation – in family firms. Using 5,071 observations from among the listed firms in Taiwan over an eight-year period (2014–2021), we examined the relationships between FFs and green innovation. The results indicate that FFs are more likely to develop green innovation than their nonfamily counterparts. In particular, there are complicated effects within different types of FFs – control deviation family firms (CDFFs).

Keywords
CSR committees，family firms，green innovation，socioemotional wealth，Taiwan

Like Father Like Son: How Perceived Parental Mentoring Strategies Shape Successors’ Entrepreneurial Identity in Chinese Family Businesses

Ganlin Mia Li, Bingbing Ge, and Junsheng Dou

Abstract
Parental mentoring plays a pivotal role in fostering intrafamily succession and entrepreneurial endeavors. Taking an identity-based perspective, we conducted an exploratory multiple case study involving nine Chinese family firms to investigate how successors perceive the influence of mentoring from their entrepreneurial parents on the development of their entrepreneurial identities. Our findings reveal that successors’ entrepreneurial identity changes from ambiguous to clarified through four perceived parental mentoring strategies, namely laying foundations, painting bright futures, relating experiences, and leading by examples. In particular, we show how the unique Chinese family dynamics resulted in some paradoxical tensions influencing the successors’ entrepreneurial identity. By taking a holistic view, we conceptualize parental mentoring as a crucial nurturing strategy for successors and connect it to the process of successor identity transformation. This research sheds light on the nexus of entrepreneurial identity, family dynamics, and the Chinese cultural context within the realm of family business research and practice.

Keywords
Chinese cultural context，entrepreneurial identity，family business，family dynamics，intrafamily succession，parental mentoring

Family Diversity and Hybrid Entrepreneurship: A Family Embeddedness Perspective

Jialin Song, Yiyi Su, Zhujun Ding, Sihong Wu, and Di Fan

Abstract
How does family diversity affect the choice of hybrid entrepreneurship? The effect of family dynamics has received little attention in research on the mode of entry into entrepreneurship. Building on the family embeddedness perspective, we hypothesize that the diversity of family households at surface (i.e., age and gender) and deep (i.e., work experience and education background) levels impacts the entrepreneur’s adoption of a full-time or hybrid mode to start a new business. We further theorize that the effects of family diversity on entrepreneurial entry decisions are moderated by income stratification, which largely determines the ways entrepreneurs deal with family diversity. Using a sample of 1,320 individual-wave observations from the China Health and Nutrition Survey (CHNS), our findings demonstrate that the choice of hybrid entrepreneurship is affected more by deep-level diversity than surface-level diversity among family households. Moreover, being from a high-strata family strengthens the relationship between surface-level diversity and the choice of hybrid entry, while weakening the effects of deep-level diversity. This study contributes to the ongoing discussion about family dynamics and entrepreneurship variations and provides important theoretical and practical implications.

Keywords
family diversity，family embeddedness，full-time entrepreneurship，hybrid entrepreneurship，income stratification

Innovation in Family Firms: An Intergenerational Tale of Symbol and Substance

Qi Wu, Yuqing Wang, Hualin Chu, and Junhang Chen

Abstract
While the innovation behaviors of family firms (FFs) have attracted burgeoning scholarly attention, few studies have investigated how intergenerational succession, one of the most critical aspects of family dynamics changes among FFs, affects innovation behaviors. Based on the socioemotional wealth perspective (SEW), we have introduced a concept of innovation decoupling that refers to the tendency of prioritizing the symbolic disclosures over substantive changes of innovation and proposed that FFs that have experienced intergenerational succession would exhibit a greater extent of innovation decoupling. By tracking a sample of Chinese publicly listed FFs from 2012 to 2021 while applying the machine learning approach, we have confirmed the proposition and further unveiled that such inclination becomes weaker when the focal FF is influenced by the family affective endowment and the successor with ascribed bureaucratic connections. Overall, this study brings new nuances to the knowledge of the innovation behaviors of FFs by highlighting the inter-firm heterogeneities and impacts of family dynamics.

Keywords
ascribed bureaucratic connections，family affective endowment，family dynamics，innovation decoupling，socioemotional wealth perspective

How Does Family Culture Generate Competitive Advantage for Family Firms? A Case Study from the Affordance Perspective

Jing Xi, Jiani Cai, and Xiaojie Wu

Abstract
Most existing literature treats family culture as a static and deterministic factor with a double-edged effect on the competitive advantage (CA) of family firms while overlooking its dynamic nature. Moreover, limited literature addresses how to solve this double-edged problem. This study fills these gaps by examining how family culture can generate sustainable CA from the lens of the affordance perspective. A three-stage process model is developed based on a longitudinal case study of Baiyun, a Chinese family firm with over a 100-year family history. This model suggests that family firms should intentionally adopt appropriate sensemaking and sensegiving strategies tailored to different stakeholders and dynamic entrepreneurship situations to effectively leverage the natural and designed affordances of family culture. By cultivating efficiency, emotional, and value identifications among internal and external stakeholders, these sensegiving strategies facilitate family collaboration, continuous trust, strategic focus, and extensive ecological synergy, which serve as the key sources of CA. Ultimately, the model emphasizes that the key to managing the double-edged effect lies in the four sensemaking strategies taken by family firm leaders. This study sheds light on the dynamic interplay between family culture, environment, strategies, and CA, offering actionable insights for family firms.

Keywords
affordances，case study，competitive advantage，family culture，sensegiving