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This study explores the question of whetherand under which circumstancesfamily involvement helps avoid business failure. We hypothesize that it is family involvement in management, rather than ownership, which reduces the risk of failure during economic downturns; however, this effect is negatively affected by the firm's entrepreneurial orientation (EO). We argue that EO hinders reaching consensuses on and commitment to family-centered goals, which are focused on long-term survival. We analyze 369 manufacturing firms in Spain from 2007 to 2013, and find that family involvement in management reduces the risk of business failure, but this effect decreases as EO increases.
family business; family involvement in management; entrepreneurial orientation; business failure; survival analysis; internal capital-markets; socioemotional wealth; corporate entrepreneurship; generational involvement; strategic management; firm performance; nonfamily firms; survival; perspective; resilience