Exploring the effects of socioemotional wealth on environmental strategies of family firms in China: An integrative perspective

Abstract The findings of family business research regarding the relationship between socioemotional wealth (SEW) and environmental strategies have been inconsistent. This study seeks to explain the inconsistency by distinguishing between extended SEW and restricted SEW. We argue that prior empirical studies may ignore the dual nature of SEW and prose that family firms with extended SEW are more likely to pursue proactive environmental strategies, whereas those with restricted SEW tend to adopt reactive environmental strategies. Furthermore, we integrate the SEW perspective with regulatory focus theory, proposing that promotion focus mediates the relationship between extended SEW and proactive environment strategies, while prevention focus mediates the relationship between restricted SEW and reactive environmental strategies. These hypotheses were tested with a survey of polluting family firms in China and were found to be supported. Our findings offer novel insights into family business research, as well as significant implications about how to enhance environmental performance of family firms.