Family business risk-taking and financial performance: Is it easier said than done?

•We analyze the risk-performance relationship, and we distinguish between risk taking orientation (RTO) and entrepreneurial risk taking (ERT).•We find a non-linear relationship between RTO and performance, which is moderated by the environment.•We find a linear relationship between ERT and performan...

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Bibliographic Details
Published in:	Journal of family business strategy Vol. 12; no. 4; p. 100435
Main Authors:	González L., Ana C., Rodríguez, Yeny E., Gómez, Juan M., Chávez, Helmuth, Chea, Jaly
Format:	Journal Article
Language:	English
Published:	Elsevier Ltd 01-12-2021
Subjects:	Contextual factors Entrepreneurial risk taking Family firm Financial performance Risk taking orientation Risk taking orientation Family firm Financial performance Entrepreneurial risk taking Contextual factors
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Summary:	•We analyze the risk-performance relationship, and we distinguish between risk taking orientation (RTO) and entrepreneurial risk taking (ERT).•We find a non-linear relationship between RTO and performance, which is moderated by the environment.•We find a linear relationship between ERT and performance.•We show that contextual factors, related to industry and country, moderate the relationship between risk and performance, for both RTO and ERT. In this study we reconcile the contradictory evidence found in the risk taking-performance relationship. We study the distinction between risk taking orientation and entrepreneurial risk taking and their effects on performance and find a non-linear, U-shaped relationship when it comes to risk taking orientation. Even though we did not find evidence that pursuing risky activities has an inverted u-shaped form, our results confirm that pursuing risky activities in family firms has similar effects than in non-family firms. We also study the role of context on family business risk attitudes and actions, and performance and find moderating effects at the industry, market and country levels on the risk taking orientation-performance relationship and partially, on the entrepreneurial risk taking-performance relationship.
ISSN:	1877-8585 1877-8593
DOI:	10.1016/j.jfbs.2021.100435