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The Invisible Hand of Evolutionary Psychology: The Importance of Kinship in First-Generation Family Firms

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  • Xiaodong Yu
  • Laura Stanley
  • Yuping Li
  • Kimberly A. Eddleston
  • Franz W. Kellermanns

Abstract

While previous studies focus on differences between family and nonfamily firms regarding CEO selection and executive compensation, this study investigates differences among family firms with different types of kinship ties. We find that, compared with family firms with close kinship ties, those with distant kinship ties are more likely to appoint a nonfamily CEO and to pay nonfamily executives lower salaries. This relationship is moderated by firm performance and family ownership. Based on evolutionary psychology, we propose that family firms with close versus distant kinships have different motivation levels to preserve socioemotional wealth.

Suggested Citation

  • Xiaodong Yu & Laura Stanley & Yuping Li & Kimberly A. Eddleston & Franz W. Kellermanns, 2020. "The Invisible Hand of Evolutionary Psychology: The Importance of Kinship in First-Generation Family Firms," Entrepreneurship Theory and Practice, , vol. 44(1), pages 134-157, January.
    • Handle: RePEc:sae:entthe:v:44:y:2020:i:1:p:134-157
    DOI: 10.1177/1042258719838256
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    References listed on IDEAS

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    Cited by:

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    4. Martínez-Sanchis, Paula & Aragón-Amonarriz, Cristina & Iturrioz-Landart, Cristina, 2020. "How the Pygmalion Effect operates in intra-family succession: Shared expectations in family SMEs," European Management Journal, Elsevier, vol. 38(6), pages 914-926.
    5. Wu, Sihong & Chirico, Francesco & Fan, Di & Ding, Jiayan & Su, Yiyi, 2024. "Foreign market exit in family firms: Do historical military and cultural frictions matter?," Journal of World Business, Elsevier, vol. 59(1).
    6. Maarten B.T. de Groot & Oli R. Mihalache & Tom Elfring, 2022. "Toward a Theory of Family Social Capital in Wealthy Transgenerational Enterprise Families," Entrepreneurship Theory and Practice, , vol. 46(1), pages 159-192, January.
    7. Feng, Cong & Xiang, Kexin, 2023. "Structural power of female executives and retailer profitability: A contingent resource-based perspective," Journal of Business Research, Elsevier, vol. 168(C).
    8. Pan, Xin & Chen, Xuanjin & Wang, Hao, 2024. "Beyond economic considerations: The role of socioemotional wealth in family firm foreign exit decisions," International Business Review, Elsevier, vol. 33(4).
    9. Pramodita Sharma & James J. Chrisman & Jess H. Chua & Lloyd P. Steier, 2020. "Family Firm Behavior From a Psychological Perspective," Entrepreneurship Theory and Practice, , vol. 44(1), pages 3-19, January.

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