Miriam Bird

Internal Versus External Ownership Transition in Family Firms: An Embeddedness Perspective

We investigate factors that influence family business owners’ choice between passing ownership within the family or to new external owners. Taking an embeddedness perspective focusing on owner–family structure and involvement, we hypothesize that ownership dispersion, number of potential heirs, multigenerational involvement, and whether the chief executive officer is a family member influence the choice of an internal or external transition of ownership. We build a longitudinal data set from a sample of 3,829 family firms and their ownership transitions. Our theorizing and findings regarding ownership transitions complements the abundant research on management succession and therefore constitutes an important contribution to the literature.

The Impact of Shared Stories on Family Firm Innovation: A Multicase Study

Innovation is a key determinant of long-term success for family firms. We apply a multiple case study research design to investigate the relationship between stories that are shared among family members across generations and the family firms’ innovations. We derive a set of four propositions suggesting that founder focus in stories is negatively and family focus is positively associated with innovation. We further propose that these relationships are mediated by the scope of decision-making options, the distribution of decision-making power between generations, and the role of conflict in the families.

Relational Embeddedness and Firm Growth: Comparing Spousal and Sibling Entrepreneurs

Integrating relational embeddedness arguments with Penrosean growth theory, we compare the growth of firms run by spousal entrepreneurs with firms run by sibling entrepreneurs. We theorize that trust, identification, and mutual obligations—the three facets of relational embeddedness—are more pronounced in spousal teams than in sibling teams, which provides spousal teams with advantages over sibling teams in generating firm growth. Probing a sample of all private firms in Sweden over a three-year period, we find support for this conjecture. Exploring boundary conditions to this baseline relationship, we also find that firm age weakens the growth advantages of spousal teams over sibling teams and that industry experience heterogeneity within the entrepreneurial team reinforces these growth advantages. These results provide important contributions for research on firm growth, the social embeddedness of firms, entrepreneurship, and family business.

The power of your mind: Entrepreneurs’ mental health, entry, and income growth

We explore the influence of mental health on entrepreneurship. Drawing from the literature of well-being, entrepreneurial affect and cognition associated with the self-determination, we examine the role of subjective well-being and mental problems on entry into entrepreneurship and entrepreneurs’ income growth. Drawing from a sample of 11,340 individuals over a seven-year period, we find that subjective well-being contributes to entry into entrepreneurship while mental problems positively impact income growth of entrepreneurship. Exploring boundary conditions for these baseline effects, we find that mental problems mitigate the positive effects of well-being, especially for novice entrepreneurs as opposed to senior ones.

The Impact of Storytelling on Innovation: a Multi Case Study

The founder’s values and beliefs are often determinant for family business’ later organizational path and as such affect the organization’s level of innovation. Building on recent research that has identified storytelling as an important means to imprint the founder’s values and beliefs, we apply a multi-case research design to investigate how different foci of those stories affect a family firm’s level of innovation. We suggest that founder-centered stories entail a focus on decisions that match with the founder’s values, hierarchical decision-making, and destructive conflicts, which ultimately lead to low levels of innovation. To the contrary, family-centered stories free family members in their decision-making and entail a collaborative decision-making characterized by low levels of conflicts. As a result, those firms have higher levels of innovation as compared to firms with founder-centered stories. We summarize our findings in a model of path creation in family firms.