A review of an article on Navigating global waters, notably on research approaches: for MBA students

A review of an article on Navigating global waters, notably on research approaches: for MBA students

 

How to describe the article in Harvard reference format?

Cambrea, D.R., Quarato, F. and Pirazzi Maffiola, K., 2026. Navigating global waters: performance outcomes of internationalization in family businesses. Journal of Family Business Management, 16(3), pp.830-844. https://doi.org/10.1108/JFBM-08-2025-0226

 

Highlight the main research issues and research objectives, 2 main academic theories used and the main research methods used in this article.

Here's a summary of the main research issues, objectives, academic theories, and research methods used in the article:

Main Research Issues:

• The article addresses the impact of internationalization on family firms' performance, considering both short-term accounting performance (Return on Assets, ROA) and long-term market-based performance (Average Market Value, AMV).
• It investigates how family firms balance the pursuit of international growth with the preservation of socioemotional wealth (SEW), the unique non-financial goals of family businesses.
• The article explores the mixed evidence on whether internationalization is beneficial or risky for family firms, particularly in light of their risk-averse behavior linked to SEW preservation.

Research Objectives:

• To empirically test the relationship between the degree of internationalization and family firm performance, specifically:

1.    To examine whether internationalization has a positive linear effect on short-term accounting performance (ROA).

2.    To investigate whether the relationship between internationalization and long-term market-based performance (AMV) follows a U-shaped curvilinear pattern.

• To provide a dual perspective on financial performance that integrates family firms’ socioemotional wealth concerns with global expansion strategies.

Two Main Academic Theories Used:

1.    Socioemotional Wealth (SEW) Theory: This theory highlights the non-financial goals of family firms, such as family control, identity, and transgenerational succession, and how these influence strategic decisions including internationalization. The article refines SEW theory by demonstrating that internationalization can be a mechanism for preserving and enhancing SEW, rather than conflicting with it.

2.    Internationalization-Performance Relationship Theories: The study builds on theories that link the extent of international diversification to firm performance, including perspectives on learning, legitimacy building, and market valuation. It empirically tests linear and curvilinear (U-shaped) relationships informed by previous research on multinational firms and international expansion.

Main Research Methods Used:

• Dataset: The study uses a balanced dataset of 641 firm-year observations of Italian and German listed family firms from 2019–2020, identified based on the European Commission’s family firm definition.
• Measures:
• Internationalization measured by an entropy-based depth metric aggregating geographical diversification of revenues across nine global regions.
• Performance measured by Return on Assets (ROA) for short-term accounting performance and Average Market Value (AMV) for long-term market-based performance.
• Regression Analysis: Two regression models were employed:

1.    Linear regression model testing direct impact of internationalization depth on performance (ROA and AMV).

2.    Curvilinear regression model incorporating a squared term for internationalization depth to test the U-shaped relationship with AMV.

• Controls: The models include relevant control variables and use robust standard errors to ensure robustness.

This approach allowed the authors to capture immediate (short-term ROA) and strategic long-term (AMV) outcomes of internationalization in family firms, considering socioemotional wealth preservation considerations

 

What research approaches (reasoning) [inductive/ deductive/ abductive] and research approaches (methods) [qualitative/ quantitative/ mixed methods research] have been used in this study?

The study employs the following research approaches and methods:

Research Reasoning Approach:

• Deductive reasoning is used in this study. The authors start with existing theoretical frameworks—primarily Socioemotional Wealth (SEW) theory and internationalization-performance theories—to formulate hypotheses about the relationship between family firm internationalization and performance outcomes (H1: positive linear effect on ROA; H2: U-shaped curvilinear effect on AMV). These hypotheses are then empirically tested using the collected data, which is characteristic of a deductive approach.

Research Methods Approach:

• The study uses quantitative research methods. It relies on statistical analysis of a large dataset of 641 firm-year observations encompassing financial data (ROA and AMV) and internationalization measures (entropy-based depth metric). Regression analysis (linear and curvilinear models) is employed to test hypotheses about the relationships between internationalization and performance variables. All variables are drawn from databases (Orbis, annual reports) with no use of qualitative data, interviews, or case studies.

In summary, the research is deductive and uses quantitatively grounded statistical methods to empirically test theoretically derived hypotheses.

 

Conduct a review of the article using the Socratic Method.

Using the Socratic Method, I'll guide a critical review of the article by posing and answering a series of probing questions to explore its purpose, assumptions, methods, findings, and implications.

---

1. What is the central question or problem the article addresses? The article investigates how internationalization affects family firm performance, specifically examining differences between short-term accounting performance (ROA) and long-term market-based performance (AMV), framed within the context of preserving socioemotional wealth (SEW).

2. Why is this problem important? Family firms represent a significant segment of the global economy, especially in Europe, but their internationalization behavior and resulting performance outcomes are less understood. Understanding this can help family firms balance financial goals with non-financial SEW priorities during global expansion, which has important strategic and policy implications.

3. What theoretical perspectives do the authors rely on? They draw on the Socioemotional Wealth (SEW) framework, which highlights family firms’ unique emphasis on non-financial goals such as family control, legacy, and identity, often leading to risk-averse behavior. They also engage international business literature on internationalization-performance relationships, including linear and non-linear (U-shaped) patterns.

4. How do the authors formulate their hypotheses?

• Hypothesis 1 (H1) posits a positive linear relationship between internationalization and short-term accounting performance (ROA), suggesting that initial international activities yield immediate operational benefits without violating SEW.
• Hypothesis 2 (H2) posits a U-shaped curvilinear relationship between internationalization and long-term market-based performance (AMV), implying that while early international engagement may depress market valuation due to perceived conservative strategies, deeper engagement eventually enhances firm value as legitimacy and capabilities grow.

5. Are the hypotheses logically derived and grounded in theory? Yes, the hypotheses follow logically from SEW theory and internationalization literature. H1 is based on immediate operational efficiency gains, while H2 reflects a dynamic tension between cautious resource commitment (initially perceived negatively) and accumulated international experience (leading to gains).

6. What methods do the authors use to test their hypotheses? They employ a quantitative approach with secondary data from 641 observations of Italian and German listed family firms collected from Orbis and annual reports. They use pooled ordinary least squares (OLS) regression with robust standard errors, testing both linear (H1) and quadratic terms (H2) in internationalization measured via an entropy-based geographic diversification metric.

7. Are the methods appropriate for answering the research question? Yes, the use of large-scale quantitative data with objective financial and market indicators is appropriate for investigating relationships between internationalization and performance. The entropy measure captures geographic diversification, and regression models allow testing linear and curvilinear effects.

8. What are the key findings?

• Supporting H1, internationalization positively and linearly relates to short-term performance (ROA), signaling quick operational benefits.
• Supporting H2, evidence suggests a U-shaped curvilinear relationship between internationalization and long-term market value (AMV), with early internationalization depressing market valuation but valuation improving after surpassing a depth threshold.

9. Are the findings robust? Robustness checks using alternative performance measures (ROE and excess market value - EMV) corroborate the main findings, especially the U-shaped relationship for long-term market valuation, lending credibility to the results.

10. Do the conclusions logically follow from the results? Yes, the authors conclude that family firms can simultaneously pursue SEW preservation and achieve financial gains from internationalization, with distinct short- and long-term patterns. The study nuances simplistic views of family firms as purely risk-averse, showing strategic ambidexterity over time.

11. What are the theoretical contributions of the study?

• Refining SEW theory by showing internationalization as a mechanism to enhance SEW rather than conflict with it.
• Empirically confirming a U-shaped internationalization-performance relationship in family firms, highlighting dynamic adaptation.
• Emphasizing the importance of separating short- and long-term performance metrics.

12. What practical implications arise for family firms and policymakers? Family firms should embrace internationalization, starting conservatively but persisting to achieve long-term value benefits. Policymakers can support this via targeted programs reducing risk and providing resources tailored to family firm needs.

13. What limitations do the authors acknowledge?

• The internationalization measure may not capture all dimensions of global engagement.
• Lack of direct empirical measures of SEW dimensions limits insight into specific emotional goals’ effects.
• The short two-year data window may limit capturing long-run dynamics fully.

14. How might future research build on this study? Future studies could use richer multidimensional internationalization metrics, incorporate qualitative data to capture SEW nuances indirectly, examine governance factors like generational involvement, and extend temporal coverage to better observe long-term trajectories.

15. Overall, how compelling and valuable is the study? The study provides a well-theorized, methodologically sound, and empirically grounded investigation into a complex and underexplored phenomenon. By integrating SEW with international business performance modeling, it advances both theory and practice for family firms navigating global markets.

---

Summary: By critically asking and answering focused questions, we see that the article thoughtfully addresses a relevant issue using proper theory and methods, finds meaningful results with robust implications, acknowledges its limits, and sets a strong agenda for further research. This shows a rigorous and valuable contribution to understanding internationalization among family businesses.

 

Describe 2 main research limitations of the study.

The study identifies two main research limitations:

1.    Measurement of Internationalization: The study uses an entropy-based metric to capture the depth of internationalization, which may not fully reflect the multifaceted nature of family firms' global engagement. For example, it does not differentiate aspects such as the number of countries entered, the diversity of geographic regions, or the specific modes of market entry. This limitation suggests that the complexity and heterogeneity of internationalization strategies might be underrepresented [T8].

2.    Lack of Direct Empirical Measurement of SEW Dimensions: Although the theoretical framework heavily relies on Socioemotional Wealth (SEW), the study does not empirically measure SEW dimensions or examine how different aspects of SEW (such as preserving family identity versus ensuring continuity) interact with internationalization strategies. This limits the ability to unpack how specific non-financial family goals influence the internationalization–performance link [T8].

Additionally, the relatively short observation period (2019–2020) constrains capturing the full maturation of the long-term U-shaped relationship between internationalization and market-based performance, highlighting the need for future longitudinal studies [T8].