Family Ownership and Alliance Intensity

In this paper, we study the relationship between family ownership and corporate alliance intensity. Theoretically, we propose that the tendency of family firms to pursue socioemotional wealth objectives exacerbates the level of information asymmetry they display vis-a-vis other firms, reducing their attractiveness as alliance partners. Based on a panel of US firms, we find that family firms join fewer alliances than non-family firms. In line with our arguments, we also find that analyst and media coverage, and the presence of dedicated institutional investors mitigate the negative relationship between family ownership and alliance intensity. By highlighting the role of family ownership in alliances, we provide new insights into the debate on the ability of family firms to develop. Moreover, we contribute to research on the antecedents of alliances by introducing the role of owners' attributes and identifying a set of mechanisms that mitigate the informational hazards that family firms present to prospective partners.