Inter-firm marketing collaboration in family businesses: The role of risk aversion

• Published in: Journal of small business strategy Vol. 31; no. 2; pp. 53 - 61
• Main Author: Ibáñez, María J
• Format: Journal Article
• Language: English
• Published: Peoria Small Business Institute 01.01.2021
• Subjects: Attitudes; Collaboration; Cooperation; Decision making; Entrepreneurship; Family owned businesses; Marketing; Product development; Small business
• ISSN: 1081-8510; 2380-1751

Family businesses show low participation in inter-organizational collaborations. Inter-firm collaborations are activities in which companies seek to access resources and develop capabilities that they cannot achieve on their own. While there is empirical evidence that family businesses show a high level of risk aversion, some studies have shown the opposite. Further, research on this topic has focused mainly on economic and financial decisions, but few studies explore family business attitudes toward risk in non-financial decisions, such as marketing collaborations. Using a bivariate probit model in a sample of 1,118 Chilean family firms, we analyzed the extent to which the degree of risk aversion influences the probability of family firms participating in marketing collaborations with other firms and on the probability of cooperating with firms with which the family firm has had previous business experience. We found that although most conservative family firms are reluctant to take risks when entering a collaborative relationship, they are willing to take risks when engaging with partners with whom they have not had a previous relationship. The findings expand on research regarding family businesses' attitudes toward risk, relative to strategic non-financial decisions, and the theoretical development of their collaborative marketing visions.