China Listed Family Firms' ODI Mode Choice

When conducting ODI,family firms need to choose establishment mode between greenfield investment and cross-border acquisition,as well as choose entry mode between wholly-owned and joint venture.Using Logit regression and a sample of 2173 overseas affiliates invested by 644 China A-share listed family firms listed before 2016,this study empirically analyzed how family ownership and family management involvement could affect family firms' ODI mode choice and investment risk's moderating effect on those relationships.This study finds that family firms with family members serving as chairman or CEO are more likely to choose greenfield investment in ODI establishment mode choice for preserving their socioemotional wealth.When choosing ODI entry mode,family firms with greater family ownership are more likely to choose wholly-owned mode to preserve family control and influence.Family firms with family members serving as chairman or CEO are more likely to choose joint venture to establish good and long-term relationships with their partners.This study also finds that host country investment risk has moderating effects on above relationships.In ODI establishment choice,investment risk enhances the positive relationship between family management involvement and propensity of choosing greenfield investment.In ODI entry mode choice,family firms with higher family ownership are less likely to make high resource commitment and thus choose wholly-owned mode for preserving family wealth.Meanwhile,at higher investment risk region,it is more difficult for family firm to reach joint venture relationships which is preferred by family chairman or CEO.Thus,investment risk reduces the propensity of choosing wholly-owned by family firms with family members serving as chairman or CEO.