The impact of finance and governance on the internationalisation modes of family firms

By drawing on the resource-based view, this study explores the influence of a firm's finance and governance structure on its internationalisation mode using a sample of Austrian and German medium- and large-sized family firms. While medium equity levels, sophisticated financial management and external ownership foster higher levels of international activity and foreign direct investment, they do not affect a family firm's decision to export. This finding suggests that the influential power of finance and governance variables depends on the mode of internationalisation and the capital needs and other resource requirements related to it. Moreover, our results imply that certain finance and governance factors mitigate the risks associated with internationalisation, particularly higher internationalisation modes, and can therefore spur these international activities. In contrast to previous research, however, the empirical analyses do not show any influence of non-family managers.