The Moderating Effect of Family-Ownership on Firm Performance: An Examination of Entrepreneurial Orientation and Social Capital
AbstractWithin the small business literature, a number of recent studies have examined the importance of entrepreneurial orientation (EO) and the development of social capital (SC) as each contributes to a firm's performance. While it is generally accepted in previous studies that each of these constructs positively affects firm performance, relatively less attention has been paid to potential moderating factors that can affect these relationships. The purpose of our research is to address one such moderator, family ownership. Using structural equation modeling (SEM) to test the moderating effect of family ownership on the relationships among entrepreneurial orientation, social capital, and firm performance, our results show that the effects of EO and SC vary depending upon whether the firm is family-owned or non-family owned. Implications of these findings and future research directions are provided.
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