Acquisition propensity in family firms: The multifaceted role of family involvement

Building on behavioral agency theory, we explore the role played by corporate governance characteristics of family firms’ in affecting their acquisition propensity. Specifically, we investigate family members’ ownership stake and their appointment to the board of directors as predictors of the likelihood to execute acquisitions. Furthermore, we explore the effect of having a family CEO and the generational step. Using a sample of 207 acquisitions executed by 93 Italian listed family firms in the 2014-2020 period, we find evidence that the extent of family ownership does not affect acquisitions propensity. Additionally, while family members on the board are negatively associated with acquisitions, the opposite emerges in case of a family CEO. Finally, the propensity to acquire does not appear to be driven by whether the firm is still in its founding generation or later generations.