The Determinants of International Performance for Family Firms: Understanding the Effects of Resources, Capabilities, and Market Orientation

2.1 Theoretical Underpinnings

The focus of the Uppsala model as first proposed by Johanson and Vahlne (1977) and later refined by Vahlne and Johanson (2017) falls essentially on experiential learning and knowledge that companies hold about international markets. According to Eriksson et al. (1997), this knowledge encapsulates the notion that companies hold about international markets and about firms’ internationalisation processes. Vahlne and Johanson (2017) correspondingly classify this knowledge as a key facilitator to the success of internationalisation processes and international performance standards. Thus, for this same motive, some authors have focused not only on the antecedents of internationalisation, but also on the international performance with the knowledge held about international markets (e.g. Calof and Beamish 1995; Canabal and White 2008) and knowledge about the culture (e.g. Brouthers and Brouthers 2000; Game and Apfelthaler 2016) deemed as fundamental factors.

The internationalisation literature proposes that the level of academic qualifications of company managers (Katsikeas 1996) and the depth and value of their international experience (Bloodgood, Sapienza, and Almeida 1996) can raise a company’s internal knowledge in a direct and positive relationship with the level of international performance. Thus, according to the behavioural theory of firms (Cyert and March 1963), specifically in the context of assumptions regarding socio-emotional wealth and in line with the assumptions underpinning the Uppsala model (Johanson and Vahlne 1977, 2009), we propose that FFs attain better levels of international performance whenever deploying higher levels of education, experience in international business, and knowledge about the target international markets (Stieg et al. 2018).

Within this context, applying the RBV and market orientation can provide two approaches to explaining the international performance of FFs; such knowledge, capabilities, and the requirements for knowledge about client needs defended within the framework of these approaches, and this can prove fundamental to the international growth of FFs (Golovko and Valentini 2011; Rodriguez 2009; Shi, Graves, and Barbera 2019; Zahra, Neubaum, and Huse 1997).

In particular, the role of intangible resources has often been mentioned as a source of sustained, competitive advantage of firms (Barney 1991, 2001; Peteraf 1993). In the context of human capital, Perdreau, Le Nadant, and Cliquet (2015) introduced capabilities, knowledge, and experience of the employees. It should be noted that their competences, international experience, and risk aversion, among others, will likely be implemented in different ways depending on the family character of these employees. Our study is in line with Perdreau, Le Nadant, and Cliquet (2015) by focusing on the intangible nature of human capital as an antecedent of superior firm performance.

However, the particularities of FFs and their desire to protect their socio-emotional wealth (SEW) may lead them to take up different positions. The SEW perspective implies that family relationships dominate FFs (hence, with long histories of knowledge and shared experiences that shape and influence their current strategies) (Berrone, Cruz, and Gómez-Mejía 2012). Granovetter (1985) concludes that family members, in their determination to protect family ties and to exclusively share knowledge among family members may lead companies to replace formal education and/or prioritise factors other than the need to develop human capital. This prevails to such an extent that some authors have verified the existence of FFs with lower levels of human capital returning lower levels of international performance (Casillas and Acedo 2005; Cerrato and Piva 2012), alongside other studies reporting that the level of international business closely interlinks with the educational level of the owner (Sundaramurthy and Dean 2008). Graves and Thomas (2008) argue how, in general, FFs deploy lower levels of advanced management qualifications than non-family owned companies and with the former also normally holding lower levels of international business experience than their corporate peers and driving lower levels of international performance as a result (Banalieva and Eddleston 2011; Boellis et al. 2016; Gómez-Mejía, Makri, and Kintana 2010; Kuo et al. 2012). Consistent with the RBV, Gallo and Pont (1996) suggest that FFs also tend to contract managers without international experience, while the opposite occurs only when the family managers have obtained international experience (Banalieva and Eddleston 2011).

The companies need to apply sufficient levels of idiosyncratic, rare, and valuable knowledge to obtain high levels of international performance (Grant, Jammine, and Thomas 1988; Kogut and Zander 1993). Within the same framework, knowledge about the specific international business ongoing in a particular market or culture, is crucial to high levels of international performance (Fletcher and Harris 2012), serving as the foundation for international competitiveness of firms (Lu and Beamish 2006; Swinth and Vinton 1993).

Thus, we can conclude that extending the international engagement of any family-owned firm arises from the interactions between the family and the company characteristics due to their effects on committing resources and capabilities to internationalisation with this relationship generating positive direct effects on the level of international performance (Coviello, Kano, and Liesch 2017; Shi, Graves, and Barbera 2019).

Table 1 presents a summary of the main studies on resources and capabilities, and market orientation.

3.1 Resources, Capabilities, and Market Orientation (i.e. Internationalisation Motivations)

A shared concern among scholars in marketing (e.g. Hunt and Morgan 1995) and RBV (e.g. Barney 1991) encapsulates the search for answers to the fundamental challenge at the core of organisational survival: What leads to competitive advantage and how might this be sustained?

While competitive advantage receives a variety of different and not always compatible definitions across marketing and RBV, the shared emphasis focuses on leveraging the resources for the creation and maintenance of value to the parties interested in a particular organisation.

The MO literature provides insights into the firm’s capabilities that are crucial to generating superior customer perceptions (Basco et al. 2021; Day 1994; Hunt and Morgan 1995). Day (1994) conclude that market-oriented organisations are those that have skills superior to the level of understanding and satisfying customer needs, whose main characteristics are (a) a set of beliefs that put customers’ interests first, (b) the ability to generate, disseminate, and use superior information about customers and competitors; and (c) the coordinated application of cross-functional resources to create superior customer value. Day (1994) further notes that superior understanding of customer needs, competitor actions and market trends allows a market-oriented company to identify and develop the capabilities needed to achieve superior long-term performance.

Similarly, Hunt (2012) observes that market-oriented companies are those with the organisational capacity to systematically (a) gather market intelligence relating to current and future customers and current and potential competitors, (b) disseminate intelligence across departments and (c) respond to intelligence in terms of market offers (goods and services). Kumar et al. (2011) note that a MO emphasises the importance of using information and that the main objective of a MO is to deliver superior customer value based on the firm’s knowledge of customers and competitors. These authors also found that developing and improving a company’s MO can allow it to develop distinct marketing capabilities (in relation to competitors) as a potential source of sustainable competitive advantage. By entering a process of continuous acquisition of information about customers and competitors and sharing that information within the organization, market-oriented companies are well positioned to develop an organisational memory and, thus, become a learning organisation (Varadarajan 2020).

Irrespective of compatibility and the impact that the RBV holds for responding to the challenges of marketing theory and practise, we can examine how some marketing researchers have been paying attention to this aspect (Bharadwaj, Varadarajan, and Fahy 1993; Capron and Hulland 1999; Day 2001; Hunt 1997; Hunt and Morgan 1995; Lin and Wu 2014; Schilke, Hu, and Helfat 2018; Wernerfelt 1984). While this relationship may have been overlooked to some extent in the context of the specific features of FFs, the existing research findings become still more scarce (Hernández-Linares, Kellermanns, and López-Fernández 2018; Srivastava, Fahey, and Christensen 2001). Hence, Sirmon and Hitt (2003) propose that while capital assists FFs to absorb new resources more efficiently, human capital deficiencies negatively moderate this process.

The strong dependence of FFs on family managers (Habbershon and Williams 1999) reflects the lack of scope for non-family managers to understand the strategies and behaviours of current and future competitors (Newman, Prajogo, and Atherton 2016). Such situations drive fewer positive levels of MO in FFs (Short et al. 2009). Hence, the management continuity frequently attributed to FFs reflects the increased trust in the owner’s family by clients, suppliers, and employees (Sundaramurthy 2008), thus leading to strong relationships between FFs and their stakeholders. Such relationships enable these companies to gain regular feedback on behalf of their consumers (Dibrell, Bettinelli, and Randerson 2017; Newman, Prajogo, and Atherton 2016). Therefore, FFs can grasp that serving their clients is fundamental to their future success (Cooper, Upton, and Seaman 2005; Danes 2013), facilitating the identification of client needs and incorporating them into the entrepreneurial search for the means to satisfy their needs. This leads to our first hypothesis:

3.2 Resources, Capabilities, and International Performance

Penrose (1959) notes how fundamental it is for companies to develop their internal resources, through exploratory tools for knowledge and innovation so that they can add value and build up their strategic positioning. According to Grant (1991), the triggering of interest in this theory in the 1980s resulted from the strong development and growth of competitive environments, the surge in business value, and the existence of a new and diversified world of market preferences.

RBV, thus, focuses on internal resources and capabilities to identify the determinants of performance and competitive advantage of companies. Some authors have argued that the RBV should be applied in managing the internationalisation of companies (e.g. Florez et al. 2012; Zou and Stan 1998), considering the importance of studying the interactions between resources and capabilities for this process (Kaleka 2011, 2012; Lu et al. 2010; Pinho et al. 2016; Zou and Stan 1998). Resources are defined as stocks of knowledge, physical assets, human capital, and other tangible materials, and intangible factors owned or controlled (Penrose 1959; Teece, Pisano, and Shuen 1997). Based on this theoretical framework, companies with internationalisation processes should have assets and individuals with different abilities. It is the synergistic effects generated for their combinations that matter more in the process of establishing competitive advantage, rather than the simple accumulation of all these factors (Amit and Schoemaker 1993; Barney 1991). Thus, companies are idiosyncratic in terms of the bundle of resources they accumulate over time, and organisational resources are considered as ultimate sources of competitive advantage. In a study of family and non-family firms, Sanchez-Famoso et al. (2015) concludes that social capital is a fundamental resource for the performance of companies. Kaleka (2011) identifies four areas of competitive resources for internationalisation: physical assets, the scale of operation, financial assets, and the company’s experience in export market operations. In an inter-organisational context, Kaleka (2012) concludes that most of these resources can positively influence international performance.

RBV, thus, has emerged as one of the most influential strands of strategic management theory (Newbert 2008; Powell 2001; Priem and Butler 2001) and within this logic of internationalisation applies knowledge as a resource for developing the company’s own means and capabilities of competitively and commercially engaging with its target market (Luo 2001).

International companies can benefit from their associating with local companies whenever not seeking to meet basic needs, but rather generating value for its clients in competitive markets (Dewett and Jones 2001). These relationships are particularly important to FFs. The local relationships and knowledge resulting ensure that FFs undertaking internationalisation processes can expand their businesses in unknown markets and drive better international performance levels (Zahra, Ireland, and Hitt 2000). Family companies planning to enter foreign markets may, thus, deploy business relationships as a resource to acquire knowledge about markets that, in principle, differ from those prevailing in their country of origin (Gronroos 2004; Luo and Tung 2007). Based on this analysis, our second hypothesis is as follows:

3.3 Internationalisation Motivations and International Performance

Export stimuli, or the motivations for exporting, are crucial for explaining why firms engage, and flourish, in their exporting endeavours (Leonidou 1995). The early internationalisation literature argues that export stimuli, either internal or external, represent the driving force behind a firm’s internationalisation path (e.g. Wiedersheim-Paul, Olson, and Welch 1978).

Internal stimuli arise from a firm’s existing competitive advantages in the home market, as well as managerial intentions, commitment and drive with regard to international expansion. This is consistent with the entrepreneurship perspective, which focuses on managerial behaviour as the key influence on a company’s internationalisation (Andersson, Gabrielsson, and Wictor 2004; Gartner 1990). Managerial stimuli, such as enthusiasm for exporting, constitute an important part of the entrepreneurship literature (Andersson 2000; Shane and Venkataraman 2000). With respect to external stimuli, the most important motivations tend to arise from export markets themselves, such as unsolicited orders from abroad (Katsikeas 1996; Morgan 1999).

Export stimuli can also be categorised as proactive or reactive. Proactive stimuli are factors that exploit the firm’s unique internal competencies, whereas reactive stimuli result in export initiation as a response to environmental pressures (Morgan 1999). Proactive stimuli or motivations involve the seeking of export markets and opportunities, and can range from entrepreneurial (e.g. Yeoh and Jeong 1995) to aggressive (e.g. Da Rocha, Christensen, and Da Cunha 1990; Leonidou et al. 2007). On the other hand, firms that do not actively seek new export opportunities are commonly described using terms such as conservative, reactive, and passive (e.g. Williams 2008; Yeoh and Jeong 1995).

Consistent with proactive internationalisation motivations, market orientation (MO), marketing competence, and other marketing-related activities are generally considered as direct influencers of international performance (e.g. Albaum and Peterson 1984; McKee et al. 1992).

MO indicates that the company’s objectives and culture are focused on creating value for customers (Narver, Slater, and MacLachlan 2004); creating value, thus, becomes an institutionalised culture. MO is aware of customers’ expectations and needs, understanding and satisfying them, awakening feelings of being worthy and all organisational activities for the institutionalisation of this understanding (Kohli and Jaworski 1990).

Essentially, the term MO is a culture that supports the creation of value in the market and is market-driven to gain competitive advantage and consequently higher performance (Micheels and Gow 2010). Since the term MO mainly includes the introduction of new or different products/services to other international markets, it can be understood as a type of innovative behaviour and with its greater international performance (Cambra-Fierro et al. 2011; Micheels and Gow 2010). Many empirical studies confirm a positive relationship between MO and international performance (e.g. Balodi 2014; Cano, Carrillat, and Jaramillo 2004; Gerschewski, Rose, and Lindsay 2015; Kirca, Jayachandra, and Bearden 2005; Laukkanen et al. 2013).

Kirca, Jayachandra, and Bearden (2005) conducted a meta-analysis based on the literature on this topic and found that MO positively affects different variables, such as business evolution, sales, market shares, perceived quality, customer loyalty, and general satisfaction, and, hence, international performance. This evidence supports the fact that within their markets, market-oriented companies seek to offer products and services whose value buyers can perceive as exceeding the expected value of alternative products offered by competing companies, thus leading to increased performance (Acosta, Crespo, and Agudo 2018).

When comparing FFs without MO to those FFs with a developed sense of MO, the latter tend to hold a better understanding of the needs and desires of foreign clients (Tokarczyk et al. 2007). Furthermore, they are often better able to grasp the strategies and capabilities of the competitors and external factors and may respond more appropriately to the demands of changing environments and, therefore, benefit from competitive advantages (Acosta, Crespo, and Agudo 2018). Hence, MO is valuable, rare, imperfectly imitable, and irreplaceable, and at the least enables the generation of competitive advantages. There are a series of studies that confirm how MOs can positively influence the international performance of FFs (e.g. Acosta, Crespo, and Agudo 2018; Armario, Ruiz, and Armario 2009; Boso, Cadogan, and Story 2013; Chung 2012; Escandón-Barbosa, Hernandez-Espallardo, and Rodriguez 2016; Hernández-Linares, Kellermanns, and López-Fernández 2018).

Applying MOs indicates that FFs define their objectives and culture in accordance with the values of their clients (Narver, Slater, and MacLachlan 2004), with the creation of value becoming an institutionalised culture. MO, especially in FFs, considers the expectations and needs of clients, understanding and satisfying them (Shi, Graves, and Barbera 2019). There are various authors who defend the uniqueness of FFs (e.g. Habbershon and Williams 1999; Habbershon, Williams, and MacMillan 2003; Hernández-Linares, Kellermanns, and López-Fernández 2018; Sirmon and Hitt 2003), and how their capabilities act in particular ways (Carney 2005; Hernández-Linares, Kellermanns, and López-Fernández 2018) may have important impacts on the relationship between the MO and the standard of international performance (He and Wei 2011).

Consistent with the international entrepreneurship literature (e.g. Andersson 2000; Gerschewski, Rose, and Lindsay 2015), we hypothesise that the manager’s influence is critical in the context of the SME’s decision regarding whether or not to engage in internationalisation. The preparation and planning – and the resultant firm readiness – associated with proactive managerial export motivations have been related to superior performance in foreign markets (Dean, Menguec, and Myers 2000; Francis and Collins-Dodd 2000; Gerschewski, Scott-Kennel, and Rose 2020). In addition, an active and programmatic approach to exporting has been found to differentiate successful exporters from unsuccessful ones (e.g. Leonidou 1998). Based on this evidence, we propose that proactive internationalisation motivations, such as active seeking of new international markets and managerial drive for exporting, are important antecedents for being export-ready with resultant superior firm performance.

Accordingly, our third and last hypothesis is as follows:

Figure 1:

Conceptual model.

4.1 Survey and Data Collection

In order to obtain the data for this study, we developed and distributed an online, web-based questionnaire to 8103 family-owned exporters and/or interested in exporting companies from the AICEP – Portugal Global database. The questionnaire was addressed and emailed to the managers responsible for the companies’ internationalisation process and strategy. To confirm that the companies included in the research were family firms, we included a question whether one or two closely related families control at least 50 percent of the shares if they are privately owned, or at least 25 percent if they are publicly traded (Miller et al. 2013). The overall sample consist of 275 firms, and the study sample includes 212 valid responses received. Table 2 provides the characteristics of the sample of this study.

4.2 Measures

Table 3 presents the variables deployed in our research and the means of measurement.

We also used several control variables in our study, including ‘Year of internationalisation’ and two dummy variables associated with sectors of activity (‘Wholesale and retail trade: 0 – No vs 1 – Yes’; and ‘Transformative industry: 0 – No vs 1 – Yes’).

4.3 Data Analysis

We applied structural equation modelling (SEM) with Partial Least Squares (PLS) serving as the calculation methodology, to validate the hypotheses of the study. This research approach is widely disseminated and commonly adopted in the business sciences (Hair, Howard, and Nitzl 2020). The deployment of PLS-SEM as an alternative to covariance based SEM (CB-SEM) stemmed from the items not following normal distribution patterns, an assumption for the data distribution under CB-SEM, and with the sample dimension not enabling calculations in accordance with the CB-SEM methodology (Hair et al. 2019; Hair, Howard, and Nitzl 2020; Sarstedt et al. 2019).

To confirm the factorial structure of the instrument used, we examined the robustness and validity of the indicators used to represent and measure the theoretical concepts (Hair, Howard, and Nitzl 2020; Sarstedt et al. 2019). The construct validity stems from the magnitude by which a set of items reflects the latent theoretical construct established for measurement and the robustness of the instrument refers to its own properties in terms of consistency and the reproducibility of the measurement (Hair, Howard, and Nitzl 2020; Sarstedt et al. 2019). We used the variance inflation factor (VIF < 5) to evaluate the potential presence of multicollinearity in the independent variables, and all values of our independent variables were less than five.

Table 4 provides a summary of the criteria (e.g. Fornell and Larcker 1981; Hair et al. 2010; Henseler, Ringle, and Sarstedt 2015) for analysing the validity and robustness of the data collection instrument applied.

Given there are no overall goodness-of-fit measurements appropriate to PLS estimated models as in the covariance based structural equation methodologies, the evaluation of PLS estimated structural models takes place through analysis of the determinant coefficient values (R Squared greater than 25%) for the endogenous constructs and the value of the Standardized Root Mean Squared Residual (SRMR below 0.08). In estimating the structural models, we applied the bootstrapping procedure (with a sample of 5000 bootstraps), to determine the t statistics and their respective statistical significance.

We used SmartPLS Version 3.3.2 and IBM SPSS Version 27.0 to conduct the statistical analyses for this study (Henseler, Ringle, and Sarstedt 2015).

4.4 Construct Validity and Reliability

All constructs, the factorial loadings, Cronbach’s Alpha, and composite robustness returned values above the threshold of 0.7, respectively. For all constructs, the AVE came in above the 0.5 limit. To test whether the constructs were sufficiently mutually different, we verified the discriminant validity in accordance with the Fornell and Larcker criteria (1981), which requires that the AVE of any construct be greater than the square of the greatest correlation with any construct.

Table 5 displays the results returned by the descriptive statistics as well as those for reliability and the validity of the latent constructs. This observes how various constructs return high levels of robustness as well as factorial, convergent validity, and discriminant validity, and, thereby, enabling their classification as valid and robust for utilisation.

5.1 Testing of Hypotheses

To determine whether the Resources and Capabilities dimensions impact on the Internationalisation Motivations and International Performance dimensions and which Internationalisation Motivations factors predict International Performance, we estimated the first order structural model (see Figure 2). This portrays how Resources generates a statistically significant and positive impact on the Motivations related to the Internal Market Characteristics (β = 0.398; p < 0.01) and External Market Characteristics (β = 0.226; p < 0.05) dimensions to Internationalisation Motivations. The Capabilities equally return statistically significant positive impacts on the Motivation dimension related to the Internal Market (β = 0.289; p < 0.05) and External Market Characteristics (β = 0.250; p < 0.05) of Internationalisation Motivations. The Resources (β = 0.278; p < 0.05), the Capabilities (β = 0.385; p < 0.05) and the Motivations related to the Internal Market Characteristics (β = 0.485; p < 0.01) provide a statistically significant positive impact on International Performance.

Figure 2:

Estimated first order model: standardised coefficients (SD).

Table 6 and Figure 3 provide the results of the structural model within the framework of validating the hypotheses. The structural model estimated returns with a high level of predictive power (R Squared ≥ 40.9%), and an SRMR result of 0.073.

Figure 3:

Estimated model: standardised coefficients (SD).

In terms of our Hypothesis H1: The combination of resources (i.e. about internationalisation networks) and capabilities (i.e. employee characteristics and knowledge) is positively related to the internationalisation motivations of family firms, we find that there is a statistically significant positive impact of resources and capabilities on OM (β = 0.309; p < 0.01). Hence, H1 receives support from our study.

This result supports the compatibility between the RBV and marketing theory and practice (e.g. Bharadwaj, Varadarajan, and Fahy 1993; Capron and Hulland 1999; Day 2001; Hunt 1997; Hunt and Morgan 1995; Wernerfelt 1984). Therefore, this demonstrates the correspondence between resources and capabilities and the importance of analysing the conditions prevailing in external environments through adopting a strategic orientation, more specifically a MO, with this relationship essential to the growth of FFs (Daspit, Long, and Pearson 2019; Fuller, Jacobides, and Reeves 2019). In the case of FFs, many authors emphasise the importance that their relationships with clients hold to their sustained firm success (e.g. Dibrell, Bettinelli, and Randerson 2017; Newman, Prajogo, and Atherton 2016). MO also constitutes a fundamental factor in this client relationship. However, this only seems able to produce the expected results when companies can combine both their resources and capabilities in building this strategic orientation (Hernández-Linares, Kellermanns, and López-Fernández 2018; Srivastava, Fahey, and Christensen 2001).

In terms of our Hypothesis H2: The combination of resources (i.e. about internationalisation networks) and capabilities (i.e. employee characteristics and knowledge) is positively related to the international performance of family firms, our results provide support to the positive and statistically significant effect of resources and capabilities on International Performance (β = 0.402; p < 0.05). This aligns with the positions of various authors who argue that the relationships between companies from different countries can provide an extremely important resource to FFs embarking on internationalisation processes (e.g. Powell 2001; Priem and Butler 2001). In this sense, the RBV once again demonstrates its importance to the performance of companies. Of the three factors for applying the RBV by Grant (1991), we can conclude in our study that FFs adopt at least two of them: 1) strong development and growth in a competitive environment (whenever internationalising, companies encounter hostile and dynamic environments); and 2) the existence of a new and diversified world of market preferences. Company relationships, thus, enable FFs to internationalise and improve their international performance (Gronroos 2004; Luo and Tung 2007; Zahra, Ireland, and Hitt 2000).

In terms of our Hypothesis H3: Proactive internationalisation motivations are positively related to the international performance of family firms, the findings indicate a statistically significant positive effect of Proactive Internationalisation Motivations on International Performance (β = 0.465, p < 0.05), thus providing statistical support to H3. Our results thereby support the importance of FFs focusing on understanding and satisfying the needs of clients, while simultaneously analysing and pre-empting the actions of competitors to effectively protect and maintain their competitive positions within the market (Acosta, Crespo, and Agudo 2018). In the case of international markets, this logic holds still greater force given that internationalisation necessarily requires meeting the needs of clients who are less well-known to the company (Cambra-Fierro et al. 2011). We, thus, provide support to the findings of various authors regarding the positive impact of MO of FFs on their firms’ international performance (e.g. Boso, Cadogan, and Story 2013; Chung 2012; Escandón-Barbosa, Hernandez-Espallardo, and Rodriguez 2016).

6.1 Theoretical Implications

The results obtained by our study generate relevant theoretical implications regarding the impact of the resources, capabilities, and internationalisation motivations on the international performance of FFs. In accordance with several authors in the fields of strategic management (e.g. Deutscher et al. 2016; Ferreira et al. 2016), firm internationalisation (e.g. Hagen et al. 2017; Knight and Liesch 2016; Paul, Parthasarathy, and Gupta 2017; Pehrsson 2016) and international performance (Acosta, Crespo, and Agudo 2018; Gerschewski, Rose, and Lindsay 2015; Knight and Liesch 2016; Weerawardena et al. 2007), our research analyses the conjugation of all of these components simultaneously (i.e. resources and capabilities, internationalisation motivations, and international performance), thus providing a more fine-grained and integrated analysis of the issues at hand.

Our research provides theoretical advancements in terms of incorporating internationalisation motivations when analysing antecedents of international performance for firms. While there have been some studies in the context of SMEs and international entrepreneurship (e.g. Gerschewski, Scott-Kennel, and Rose 2020; Tan, Brewer, and Liesch 2007), there seems to be a lack of literature in terms of the family business research area.

Within this framework, the empirical evidence of our study underpins how the international performance of FFs derives from the strategic variables: resources and capabilities and internationalisation motivations. In our case, we can conclude that all these facets return positive effects. Therefore, in addition to the specific nature of the explanatory variables, there seems to be a clear need to interconnect the different variables to obtain an integrated perspective on the factors determining the international performance of FFs.

According to our results, the international performance results are subject to the influence of the adopted strategic decisions that relate to the RBV and the approach to dynamic capabilities, such as MO while also demonstrating the crucial role that FFs perform in the commercial trade and business ongoing between the countries (Lobo et al. 2020). The empirical evidence underpins the argument that the stronger the combination between the RBV and dynamic capabilities, ongoing through the internationalisation motivations, the higher shall be the results returned by the international performance of FFs.

Our results attain relevance in terms of their contribution to the literature as the internationalisation of FFs, and their respective international performance standards has received only a relatively low level of attention in the literature (Gerschewski 2011; Gerschewski and Xiao 2015; Knight and Liesch 2016; Zhou, Barnes, and Lu 2010).

The RBV and dynamic capabilities assume particular importance in the internationalisation process of FFs and, consequently, on their subsequent firm performance (Knight and Liesch 2016; Lim and Kim 2020). In this sense, our research responds to the need to study the strategic orientations that can directly impact the level of FF international performance.

6.2 Practical Implications

Among FFs, internationalisation has become a strategy for growth, and sometimes, even for survival (Kontinen and Ojala 2010). The results of our study generate key implications for FF managers who have already internationalised or are seeking firm internationalisation. From the point of view of the owners and managers, our findings demonstrate the importance of nurturing a proactive stance (i.e. internationalisation motivations), maintaining a network of contacts (i.e. resources), and taking on risks mitigated by the knowledge held about the external market (i.e. capabilities), to obtain high international performance standards. We also know that FFs often encounter limited scope for change, and, hence, the added pertinence of our results. It seems, therefore, pertinent that companies establish and maintain contacts with the exterior and with suppliers and clients located in international markets, to best anticipate future needs and explore business opportunities. When such firms start to internationalise, they often have to find new networks to gain the bridging social capital to enable foreign operations. It seems that having a limited number of international ties drives family SMEs to search for relevant contacts at international trade exhibitions and trade fairs (Kontinen and Ojala 2011a, 2011b). In this way, a fragmented ownership structure led to a traditional internationalization pathway, whereas a concentrated ownership base led to ‘born global’ or ‘born-again global’ (Kontinen and Ojala 2012).

Within this framework, in such a globalised and competitive market as currently prevailing, one of the critical success factors is accessing and applying reliable information. Companies need to deploy the appropriate tools to enable them to access the most detailed and precise data about the markets they wish to target and build up the knowledge necessary to engage in and deal with such complex processes as those involved in firm internationalisation. Therefore, managers should correspondingly favour innovation, remain open to experimentation, and lend their support to new ideas and practices, including their entry into new markets and a collaboration with new suppliers and partners.

Therefore, the organisation’s structure and its working procedures generally require focusing on deepening the knowledge held about partners (e.g. suppliers, intermediaries, and strategic allies) and improving the coordination of these interrelationships. These dimensions help deal with the firm internationalisation process and the need to systematise the existing information. Only thus are we able to grasp the reality of internationalised FFs, their respective internationalisation activities, their perspectives on future development and, by these means, strategically apply the acquired knowledge.

The institutional and political initiatives, those designed to advance FF internationalisation, should, thus, focus on fostering international entrepreneurship, international MO, essentially through incorporating their idiosyncratic characteristics. We know that FFs often experience resistance to change, especially in terms of the management openness to individuals outside the family, even when specialists in internationalisation processes. Thus, such policies need to assist FFs in engaging with contacts and international cooperation networks and supporting them through consultancy services provided by specialists in transactions with international partners.

The clear identification of resources and competences, the selection of markets, and the most appropriate orientations for these markets all reflect key factors in returning high international performance levels for FFs.