Purpose This study aims to examine the relationship between family firm internationalization and short-term accounting performance (return on assets (ROA)) and long-term market-based performance (average market value (AMV)), considering the unique context of socioemotional wealth (SEW) preservation. Design/methodology/approach Utilizing a sample of 641 observations pertaining to Italian and German family-owned firms, we empirically test two hypotheses with regression analysis: (1) a positive linear impact of internationalization on ROA and (2) a U-shaped curvilinear impact on AMV. Findings Our results confirm a positive linear relationship between family firm internationalization and short-term ROA, indicating immediate financial benefits from initial global engagement. Furthermore, we find support for a U-shaped curvilinear relationship between internationalization and AMV. This suggests that while early internationalization may initially temper market valuation, deeper and more extensive international engagement ultimately can contribute to enhancing long-term value. Practical implications Family business managers should recognize that even modest internationalization can yield short-term financial gains. For long-term value creation, a sustained and strategic approach to internationalization is crucial, requiring patience through initial market reactions. Policymakers can support family firms in navigating these complex internationalization trajectories. Originality/value Overall, our analysis enriches the family business and international business literature by offering a dual-perspective analysis of internationalization's impact on financial performance. It provides a more granular understanding of how family firms reconcile SEW preservation with global expansion, moving beyond a simple trade-off to a dynamic process of value creation.
Cambrea et al. (Sat,) studied this question.