The Influence of Family Management and Firm Age on a Firm’s Diversification Choices

This paper examines the influence of family management and firm age on a firm’s decisions on product versus international diversification. Based on socioemotional wealth literature and the temporal dimension of family influence, we hypothesize that family management prefers product diversification and that the positive impact of family management becomes stronger in older firms. Analyzing data from 422 manufacturing firms in the S&P 1,500, we find strong empirical support. Our findings remain robust to endogeneity concerns. This study contributes to the literature by offering new insights into how socioemotional wealth preservation and temporal factors jointly shape diversification strategies in publicly traded firms.