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Based on the panel data analysis of Taiwan’s family business groups from 2000 to 2002, this research attempts to investigate the relationships among the types of ownership structure, particularistic ties, and the engagements in regional markets from a social capital perspective. The result indicates that a family business group’s use of particularistic ties is contingent on its relative centralization in decision‐making. Consequently, the family business group’s use of particularistic ties in subsidiaries significantly influences its engagements in regional markets. This study highlights the possible role of particularistic ties as a kind of firm‐specific advantage existing within family business groups when expanding internationally. Furthermore, it indicates that the indigenous particularistic ties intrinsic to Great China societies have implications for multinational companies in the context of this region.

The purpose of this paper is to contribute a multilevel, cross-national analysis of the role that sociocultural context may play to enrich the understanding of strategic renewal in family firms. The authors conceptualize sociocultural context as consisting of firm-level social contexts and national culture, and propose that: heterogeneous social contexts in family firm management, i.e. family CEO and multigenerational involvement, give rise to mindsets that have differential effects on renewal efforts and that the proposed effects are subject to variation due to the moderation of national cultural dimensions of uncertainty avoidance and power distance.

The authors use unique date set consisting of 959 family firms from 26 countries drawn from a cross-national, quantitative study of family firms.

The authors found that family CEO is negatively related to renewal across cultures, and this relationship is attenuated by uncertainty avoidance and power distance. In addition, multigenerational involvement is positively related to renewal, and this relationship is enhanced by the two cultural dimensions.

The authors suggest that decision makers examine how different contexts, practices and cognition contribute to overall dominant logics that exist in firm. In doing so, they can evaluate how logics as a whole affect renewal, and also how different parts of the logics play a role. This overall evaluation will afford managers a holistic picture of renewal forces that operate in family firm and allow managers to make precise changes to enhance strategic renewal.

The findings support the contention that there is cultural-dependent countervailing effects on strategic renewal within family firms.

Personal political connections with politicians have positive contribution to the abnormal returns of firms (Hillman, Zardkoohi, & Bierman, 1999; Chung, 2006; Dinc, 2005; Faccio, 2006; Morck, Wolfenzon, & Yeung, 2005; Imai, 2006). Business owners and executives have incentives to invest in political connections because such relationship may enable their firms to gain access to key information not available to the competitors. However, the impact of political connections on the behaviors of firms has only received scant interest in the literature (Hillman, Withers, & Collins, 2009).

The objective of this research is to examine the impact of formal and informal political connections on the scope of family business diversification. We focus on family business because of their unique access to family ties or family social capital to achieve business objectives (Sharma, 2004; Steier, 2003). We test our hypotheses using panel data from 35 Taiwan-based family business groups from 1988 to 2002. Our analysis shows that the informal political connections possessed by the parent generation owners of family business groups are better predictors of family business diversification than the informal political connections established by the children generations owners. This result complements the resource dependence theory by suggesting that durable and non-transferable political connections possessed by family leaders have a unique effect in the corporate decision to diversify. Additionally, the personal ties between politicians and parent generation family leaders are “sticky.” They cannot be easily succeeded by the younger generations.