Buddhist leaders and family firms’ acquisition behavior

Abstract

Family firms are generally reluctant to participate in acquisitions because of the aversion to socioemotional wealth loss. This work on family firms in China shows that in contrast to non-Buddhist counterparts, Buddhist family leaders are more likely to engage in acquisitions as their Buddhist beliefs mitigate their concerns about the loss of socioemotional wealth and promote a growth orientation. The positive relationship between Buddhist leaders and family firms’ acquisition, however, is attenuated by the influence of other family members and the next generation’s succession intentions toward keeping control over the business. Results based on two samples, a cross-sectional survey of 1,993 non-listed Chinese family firms in 2010 and panel data on 1,259 listed family firms in the years 2008 to 2015, largely supported the argument that Buddhist family leaders are more likely to engage in acquisitions toward firm growth in China despite some family resistance.