Understanding Socioemotional Wealth – Examining SEW and Its Effect on Internationalization

Abstract: SEW refers to the stock of affect-related values that an owning family derives from its family business. As a promising theoretical concept, the SEW has been used widely to explain the diverse strategic choices of family firms compared to non-family firms. However, little study has been done to measure SEW directly and to measure the effect of SEW on family firms’ strategic choices.     Within the context of family-owned Hidden Champions, this thesis study replicates the five-dimension model proposed by Berrone et al. in an empirical study to verify the psychometric measurement on the degree of SEW. Furthermore, internationalization has been chosen as an example to demonstrate the effects of SEW on family firms’ strategic choices and outcomes.   This study has verified the reliability and validity of the SEW scale and SEW’s five subscales constructed. Furthermore, the measurement on SEW and its five dimensions has been applied to examine the effects of SEW and its five dimensions on the internationalization of family firms. The findings reveal that SEW has a negative effect on the internationalization of family firms, which is mainly due to the negative effect of Family Control and Influence.