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Environmental dynamism, trust and dynamic capabilities of family businesses

Yong Wang (Department of Finance, Accounting and Business, University of Wolverhampton Business School, Wolverhampton, UK)

International Journal of Entrepreneurial Behavior & Research

ISSN: 1355-2554

Article publication date: 1 August 2016




Dynamic capabilities are regarded as the bedrock of firms that survive in a dynamic environment. Notwithstanding this perspective, little research has been implemented in understanding dynamic capabilities of family firms. The purpose of this paper is to investigate the relationship between environmental dynamism and dynamic capabilities of family businesses, and the moderating effect of trust on this relationship.


A quantitative survey was executed with the sampling frame outlined based on the Hemscott Company Guru database. In total, 137 useful responses were employed in this study.


The results suggest that environmental dynamism is an antecedent of dynamic capabilities. Furthermore, findings show the presence of trust moderates the environmental dynamism-dynamic capabilities nexus.

Research limitations/implications

The cross-sectional design of the study determines that it can only proffer a snapshot of the scenario. In addition, the exclusion of non-incorporated firms in the sample because of the nature of the Hemscott database constrains the generalisability of the study. Future studies in a similar vein may be implemented through national/local development agencies to overcome this barrier.


The unique intertwined family and business system embedded in family firms has led to the assumption that trust will influence the environmental dynamism-dynamic capabilities nexus. The current study confirms this assumption and offers a perspective that helps appreciate the environment-business relationship in family businesses.



The author hereby would like to express his sincere gratitude to Ernst and Young and International Family Enterprise Research Academy (IFERA), which subsidised the research project reported in this paper. The author is also grateful to Professor Yanshuang Li (Hebei University of Technology, China), who contributed significantly to this project. Meanwhile the author would also like to acknowledge the support from Dr Martina Battisti, Editor of International Journal of Entrepreneurial Behaviour & Research, and the insightful comments from two anonymous reviewers. The early version of this paper was presented at the IFERA annual conference in St Gallen, Switzerland in 2013.


Wang, Y. (2016), "Environmental dynamism, trust and dynamic capabilities of family businesses", International Journal of Entrepreneurial Behavior & Research, Vol. 22 No. 5, pp. 643-670.



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