Board openness and family firm internationalization: a social capital perspective

Building upon social capital theory, this study investigates to what extent board openness to non-family directors affects family firm internationalization. We suggest that board compositions relate to different levels of bonding (internal) and bridging (external) social capital, which affect firm internationalization. In particular, we hypothesize a curvilinear relationship between the percentage of non-family directors in the board and FDI geographic scope. Moreover, we argue that firm age moderates the main relationship. Our analysis of a panel dataset of 7,707 family firms suggests a balanced juxtaposition of family and non-family directors in more mature firms is detrimental for FDI geographic scope. Moreover, our results show that, except for young family firms, broader FDI geographic scope emerges when the board is dominated by one homogeneous type (either family or non-family directors); however, boards dominated by non-family directors always lead to higher FDI geographic scope. We offer important theoretical insights to research on family firm internationalization, social capital, and corporate governance as well as managerial implications.