The localization choices of Italian family businesses in China: is there an agglomeration effect?

Abstract

Purpose of the paper: Based on the socioemotional wealth theory, the objective of this work is to investigate the existence of different motivations influencing the localisation choice of the FBs’ investments. We want to explore if FBs agglomerate with other FBs or, more generally, if FBs follow a different pattern rather than NFBs.

Methodology: The study was carried out using the mixed method following an exploratory sequential design. The quantitative analysis was conducted starting from a sample of 2,958 FDIs made by Italian FBs and NFBs in China, while the qualitative analysis was carried out by performing an in-depth interview with the Marketing Manager of the Italy-China Foundation and by triangulating the information with written reports.

Findings: The results are consistent with the traditional literature that identifies the main drivers of localization choices in the economic-strategic, political and institutional factors. Any different motivations from NFBs due to SEW were not confirmed.

Research limitations: A first limitation is that, in the quantitative analysis, we considered only FDIs in China and only by Italian companies. A second limitation is that, again in the quantitative analysis, the measure used to identify and distinguish FBs from NFBs is a dichotomous variable.

Implications: From a managerial point of view, what this study implies is that family companies and all the other types locate their FDIs following similar logics and so there is no difference in the strategies of localization that can be traced back to the family or non-family nature.

Originality of the paper: to date, very limited knowledge exists about the strategic location choice of FBs and particularly, the agglomeration effect in FBs compared to NFBs.