Socioemotional Paradox? Examining Tensions in Socioemotional Wealth and Socioemotional Selectivity

Research on socioemotional wealth (SEW) theory finds that family firms, relative to nonfamily firms, generally pursue a higher proportion of nonfinancial goals that provide them with SEW, or a stock of emotional value in the firm. Family succession is believed to be an important distinguishing goal that contributes to SEW in these firms. However, a socioemotional paradox exists in the literature regarding succession desirability and the strength of SEW over time. Here, using a survey sample of family firm members drawn from family firms in tourism industries, we reconcile this paradox by integrating socioemotional wealth and socioemotional selectivity theoretical perspectives. In the aggregate, this study is the first to (a) empirically incorporate emotion into SEW theory (b) directly examine how time perspective influences changes in succession desirability and (c) provide psychological mechanisms that explain heterogeneity in SEW preferences for various family members across the family firm lifecycle. Consequently, this is one of the first studies to directly examine the microfoundations of SEW theory. Potential implications for practice are positioned to help family firm succession, especially by offering psychological implications of time perspective that can help founder-run family businesses improve firm survival and longevity.