The Influence of Family Directors on Internationalization Strategies in Family Businesses

Abstract

This study analyzes the relationship between family control and the internationalization of family firms in Mexico. Grounded in the resource-based view and socioemotional wealth theory, it addresses the theoretical problem of how familiness and governance mechanisms influence strategic decisions in emerging markets. Based on 326 observations of family businesses (51) listed on the Mexican Stock Exchange (BMV) from 2009 to 2016, and using a probit regression model, five hypotheses are tested regarding the effects of family directors, board independence, CEO duality, tenure, and ownership concentration on internationalization. The results show that board independence and chair tenure foster internationalization, while ownership concentration and family directors discourage it. The findings contribute to understanding the need for governance reforms that promote more independence and leadership stability to foment internationalization strategies among family businesses in emerging markets.

1. Introduction

The disappearance of traditional borders between countries and the globalization of economies have led both family and non-family businesses to consider internationalization as part of their strategic planning. However, family businesses are heterogeneous by nature, so generalizations regarding their intention to become global are not possible [1,2]. The control that the family business exerts over senior management teams and the Board of Directors (BOD) may explain the heterogeneous behaviors in this process [3]. Strategic decisions, including internationalization, are made within the BOD of professionalized family businesses. Therefore, analyzing the characteristics of BOD members can provide clues as to which family businesses are most likely to internationalize. This paper explores the above, considering family businesses listed on the Mexican Stock Exchange (BMV) between 2009 and 2016. Of these, the majority have international exposure, which is why they are the focus of this research. Although this paper focuses on Mexico, the findings have broader implications for emerging markets characterized by concentrated ownership, relational governance, and weak investor protection [4]. These institutional conditions—common across Latin America and parts of Asia—shape how familiness influences strategic internationalization decisions, offering comparative insights for similar contexts.

This study contributes theoretically by clarifying how familiness and internationalization interact within emerging market institutions. Beyond applying these frameworks to a new context, it extends the resource-based view of familiness [5] and the socioemotional wealth perspective [6] by showing that, under weak formal institutions, family control on boards can transform familiness resources from a protective to a constraining force in strategic internationalization decisions.

Previous research has focused on studying the degree of internationalization of family businesses and the factors that facilitate or hinder their export activities [7]. Several articles analyze the characteristics of executives and their influence on internationalization. However, studies that associate the attributes of board members, whether they are family members or not, and internationalization are particularly scarce in emerging economies—such as those in Latin America—which represents a gap in the literature [8,9,10,11].

In addition, Mexican business culture differs from other widely studied cultures. Even the definition of a family business is distinct given the high concentration of ownership that characterizes businesses in Mexico [12]. Delegation of authority is not common in Mexico; business activity is based on the autocratic and authoritarian image of the founding father and, subsequently, his descendants. Executives and members of the board have a deep-rooted tradition of obedience to their superior, who typically holds control and the majority of the company’s shares. The interaction between the company and the family is much closer in this type of context, which implies a genuine interest in transferring the business to future generations and a series of competitive advantages, according to the concept of familiness [5]. It is only in recent years that a slightly more active participation of subordinates in decision-making has emerged, as a result of the transition to globalization and the free market [10,13].

Internationalization is, in principle, a strategy that serves to increase the likelihood of success and survival of both family and non-family firms. It allows for risk diversification, greater growth, market expansion, and the exploitation of economies of scale [14,15]. In Mexico, the economic and political situation tends to be more volatile than in developed countries, so internationalization can offer greater stability to businesses. However, it does not per se guarantee greater profitability for companies, as the costs derived from internationalization can outweigh the benefits. Among the disadvantages of internationalization are cultural differences in tastes and preferences, greater organizational complexity that represents, in addition to a challenge, higher administrative costs, as well as the increase in debt required to operate on a larger scale [16].

In general, the literature has studied the degree of internationalization in family businesses and how several factors impact the export activity, considering mainly performance outcomes instead of governance implications [1,7]. Some studies have shown that family ownership increases risk aversion and is detrimental to international ventures, due to preservation of socioemotional wealth and ownership concentration in family hands [6,17]. On the contrary, other studies mention that familiness brings valuable resources such as long-term sight and intense firm knowledge, that might increase internationalization efforts [5,18]. These different approaches are associated with inconsistent empirical findings with respect to family involvement and its relationship with internationalization.

The literature has also analyzed governance factors such as board independence, CEO duality, and ownership concentration in developed economies; nevertheless, evidence from Latin America is scarce and fragmented, despite the region’s distinct institutional conditions characterized by weak investor protection, strong family control, and relational governance [9,10]. This paper extends prior research by analyzing how specific governance mechanisms—family representation in the board of directors, board independence, CEO duality, and ownership concentration—jointly influence the internationalization decisions of listed Mexican family firms. In this way, the study goes beyond documenting heterogeneity by studying how governance can resolve the contradiction between growth opportunities and socioemotional wealth preservation in an emerging-market context.

The objective of this paper is to analyze the relationship between various characteristics of the members of the boards of family firms listed on the Mexican Stock Exchange (BMV) and the adoption of an internationalization strategy. Emphasis is placed on the participation of the owning family in the board, controlling for other factors that may affect the degree of control the family exercises over the family business: ownership concentration, the independence of the board, the dual role of the board chair (who is also the firm’s CEO), and the length of service in the board. Probit regression results show that a greater presence of family directors in these firms is associated with a lower likelihood of internationalization. This finding becomes more robust as ownership concentration in the hands of the family business increases. However, the degree of independence of the board and the length of service of the board chair moderate the negative relationship between the family business and the firm’s internationalization.

The article is organized as follows: Section 2 reviews the literature and formulates the study hypotheses. Section 3 describes the sample and study variables. Section 4 presents the methodology, the results of the empirical study, and their implications. This section provides a summary and outlines Section 5, which presents the research limitations and future research directions.

2. Theoretical Framework and Hypotheses

2.1. Family Business

Family businesses are inherently multidimensional [12]. For this reason, there is no clear and agreed-upon definition of a family business. A wide range of definitions can be found in the literature; however, most of these definitions revolve around three aspects that serve to delimit and help understand what a family business is: family ownership, the control the family exercises over the business, and the intention to transfer the business to future generations [13].

Empirical studies of publicly traded companies typically consider a company to be family-owned when the family holds between 10 and 25% of common shares [19]. However, given the high concentration of firm ownership in Mexico, studies specifically for this context generally use a much higher level of family shareholding (more than 50%) in the definition of a family business [12].

2.2. Internationalization of Family Business

Internationalization is a strategy that involves opportunities but also challenges. To date, there is no consensus regarding the relationship between internationalization and family businesses [1,20,21] point out that family businesses have significant shortcomings when it comes to competing in a globalized environment. Many of these weaknesses stem from a lack of family commitment to guiding companies toward new horizons. In fact, family businesses internationalize later and more slowly compared to non-family businesses [22]. These types of firms tend to be more conservative, given that a significant portion of the family’s wealth is invested in the business itself [23,24]. According to familiness, the family business’s high level of commitment to future generations and its strong family ties make decisions more cautious.

Family businesses that are committed to internationalization often view it as a reaction to changes in their competitive environment. Economic activity is being affected by the phenomenon of globalization, influencing the survival and profitability of all types of businesses [25]. Internationalization is the most complex strategy that family businesses can undertake in the face of increasing market globalization. Internationalization has traditionally focused on the domestic market, requiring significant efforts to become global [26,27].

Recent research shows that digitalization is an important tool for international ventures, especially for companies operating in weak institutional environments [28]. Digital technologies are positively related to internationalization, as they increase market access through e-commerce and digital marketing, support international networks through online platforms, and provide more efficiency in communications and processes. The latter is particularly relevant in Latin America, where digital tools can partially substitute for institutional voids by increasing visibility, credibility, and connectivity.

2.3. Characteristics of the BOD Members, Concentration of Ownership and Internationalization of the Family Business

The function of the Board of Directors is to ensure the long-term survival and solidity of the company, from an economic, competitive, and organizational perspective [29]. In professionalized family businesses, which is the case of all those listed on the BMV (Mexican Stock Exchange), strategic decisions are made within the Board of Directors. Therefore, the choice to go global falls upon this corporate governing body. The decision to internationalize requires a mindset consistent with this goal, which makes change in the processes, organizational structures, and techniques of companies feasible [30].

Board of Directors in family businesses are as diverse in size and composition as the firms to which they belong. This diversity influences the strategies adopted by them, including internationalization [31]. In family firms, the degree of family control—measured by the family’s control over BOD decisions—is one of the characteristics that reflects this heterogeneity. The control of the family business is reflected by the participation of its members within the BOD. However, the degree of family control over strategic decisions in family firms is also influenced by other factors. These include the concentration of ownership in the hands of the family business and attributes specific to BODs and their members: the BOD’s level of independence, the dual role of the BOD Chair (who is also the company’s CEO), and the length of time the BOD Chair has held the position are some of these attributes.

2.3.1. Family Members in the BOD and Internationalization

There is evidence showing that although family directors are more reluctant to change—due to their greater risk aversion—in situations that require important strategic decisions (such as when profits fall beyond what is acceptable), they are faster and more effective than non-family directors [25]. Furthermore, family directors’ greater knowledge of the company could favor the internationalization process [18].

However, most studies indicate that the relationship between internationalization and the family background of directors is inverse [32]. According to familiness, decisions made by directors belonging to the family business are based on great commitment, dedication, and sense of duty, in order to maintain the business for future generations. Family members often share a common culture, values, and norms passed down from their parents and relatives [33], which provide them with a strong emotional bond with the business and promote their level of commitment and participation in the organization. Family directors—compared to non-family directors—are more risk-averse, due to the loss that a bad decision would imply not only for the company, and consequently for the family assets, but also because of the family conflicts that this would generate [17,34]. Therefore, family members of the BOD may be more likely to vote against internationalization or any other decision that involves major strategic changes in the company.

Internationalization entails both opportunities and threats. It requires a thorough analysis of the company’s environment, resources, and capabilities, as well as knowledge of the characteristics of the countries, sectors, and the nature of demand and competition it will face. Family members in the BOD may not have the experience or capabilities necessary to carry out an internationalization process [35]. Members of the family business generally possess common knowledge and experiences acquired within family businesses [36]. Therefore, there is less diversity of skills and experiences among members of the family business, which discourages the decision to go global.

This apparent inconsistency echoes the long-standing debate on whether familiness constitutes a dynamic capability or a rigidity that constrains adaptation [5].

Given the above and grounded in socioemotional wealth theory and resource-based theory, which explain that preservation of family control and non-financial wealth increases risk aversion towards internationalization, the following hypothesis is postulated:

H1: 

The greater presence of family members within the BOD is negatively related to the probability of internationalization of family businesses listed on the BMV.

2.3.2. BOD Independence and Internationalization

The degree of independence of the Board of Directors is determined by the percentage of independent directors within the Board. Members are considered independent when they are not part of the family business or have any other relationship with the company: they are not shareholders, executives, clients, or major suppliers of the company, among other economic interests [37].

In Mexico, the Securities Market Law defines independent directors as individuals with no family, business, or professional relationships with the controlling shareholders or the company, whose role is to protect minority shareholders and strengthen transparency in decision-making. Their external experience and impartiality allow them to question the family’s risk-averse stance and introduce broader strategic options, including internationalization, consistent with the findings of [32,38].

Ref. [39] points out that a highly independent board improves the decision-making process and increases a firm’s chances of survival. By avoiding conflicts of interest, independent directors can be more objective when analyzing financial information and making decisions, and they also contribute to achieving business objectives. However, the effectiveness of independent directors depends on the resources they have (such as the information they obtain from the company) as well as the willingness of the family business to take their recommendations into account [38].

Given their broader perspective, independent directors tend to better understand and process the risks and benefits of globalization [3]. Independent directors represent a bridge between the company and the family, serving as advisors on complex issues such as internationalization. The independence of the board reduces the centralization of decision-making by the family business. Previous studies show that independent directors often mitigate the conservative view of the family business regarding internationalization [13,40].

Taking into account the above, and grounded on agency theory, which explains that independent directors reduce entrenchment and introduce professionalization and strategic openness, the following hypothesis is proposed:

H2: 

The greater degree of independence of the BOD is positively related to the internationalization possibilities of family businesses listed on the BMV.

2.3.3. Duality and Internationalization

Duality arises when the President of the board is also the company’s CEO. Excessive control by the board chairman (whether a member of the family business or not) impacts the selection and implementation of several strategies, including internationalization [41]. Some authors report greater fluidity in strategic decisions when a company has a unified leadership. Faced with the challenges of globalization, rapid and centralized decision-making fosters the implementation of an internationalization process in family businesses [21,37].

However, according to authors such as [42], complex strategies require maximizing the talents of all members of the board, and a balanced control between the chairman and the other members. Therefore, this duality can hinder a company’s ability to go global.

Given this scenario and based on upper echelons theory which emphasizes that leadership concentration reduces strategic decisions, the following hypothesis is proposed:

H3: 

Duality is inversely associated with the probability of internationalization of family businesses listed on the BMV.

2.3.4. Seniority of the President of the BOD and Internationalization

Succession represents a crucial moment in the strategic evolution of family businesses [12]. Evidence suggests that new directors (Presidents) are more likely to propose novel and innovative strategies and to perceive opportunities—such as internationalization—that have not been visualized by those who have been in the BOD for longer [30]. New directors (Presidents) may be more enthusiastic about operating in other institutional and cultural settings, to face new experiences in terms of clients, competitors and investors [43]. For those more experienced in the BOD, this requires an adaptation of mental maps, systems and internal processes to face a new international environment [44].

However, individuals acquire greater competencies based on the length of their tenure in an organization [45]. The length of time a director (President) has been in the BOD is a measure of both experience and trust on the part of family members and other stakeholders, which increases their control over the firm’s strategic decisions. Greater experience promotes the ability to solve multidimensional problems, giving greater importance to opportunities and less relevance to threats, which reduces risk aversion, even if the BOD President is a member of the family business [46]. Furthermore, greater knowledge about the competition and the market, acquired over time, favors decision-making and the adoption of complex strategies such as internationalization [47,48].

In view of the above and supported by resource-based theory which explains that accumulated managerial capital improves strategic decisions, the following hypothesis can be tested:

H4: 

The time the President of the BOD has been in office is directly associated with the probability of internationalization of family businesses listed on the BMV.

2.3.5. Concentration of Ownership and Internationalization

In Mexico, the majority of companies listed on the Mexican Stock Exchange (BMV) are family-owned, with a shareholding concentration of over 50% [12]. This is an indicator of the corporate control held by members of the family business. The control of family owners is reflected in the greater weight that family directors’ positions have in board decisions.

Some authors argue that the greater shareholding of family businesses favors unilateral decision-making and accelerates the authorization of complex strategies in the BOD, such as internationalization [49]. However, previous studies for emerging economies indicate that family firms that opt for internationalization have comparatively low ownership concentration [50].

Likewise, family businesses with a high concentration of ownership (in the hands of the family business) tend to pursue more conservative business strategies that entail lower risks compared to the internationalization strategy [51]. This can be understood according to the concept of familiness and from the perspective of portfolio diversification; when investments are not diversified, the risk for investors is greater, and therefore they are more cautious about managing this wealth [52].

The following hypothesis is then proposed, grounded in agency theory which explains that family wealth leads to risk-averse strategic decisions:

H5: 

There is an inverse relationship between the concentration of share ownership in the hands of the family business and the probability of internationalization of family businesses listed in the BMV.

Overall, this review integrates recent empirical findings with foundational theoretical debates. While new studies [32,53] provide updated evidence from emerging economies, they are interpreted here through classical frameworks of familiness [5], socioemotional wealth [6], and the resource-based view of the family firm. This approach allows us to identify ongoing tensions—between risk aversion and growth orientation, between family control and professionalization—that remain unresolved in the literature and justify the hypotheses proposed in this study.

Furthermore, the hypotheses are conceptually distinct yet connected through two central mechanisms: risk aversion and resource constraints. High ownership concentration (H5) may reduce strategic flexibility by limiting slack resources and amplifying risk sensitivity, while family control within boards (H1) channels these attitudes into conservative decision-making. In addition, leadership attributes such as duality and tenure (H3–H4) could exert conditional effects depending on contextual factors such as firm size or periods of economic turbulence [1,6]. Although testing these moderating dynamics exceeds the empirical scope of this study, acknowledging them enhances the theoretical consistency and clarifies how the hypotheses interrelate within the broader family-firm internationalization framework.

Recent evidence further supports these theoretical links. For instance, ref. [54] highlight that governance attributes such as board independence and ownership structure play a central role in explaining the international expansion of family firms in emerging markets (see also [5,6]). This recent contribution strengthens the empirical foundation of the present hypotheses and situates them within current debates on governance and internationalization.

2.3.6. Other Factors Impacting the Internationalization of Family Businesses

The decision of family businesses to internationalize is also conditioned by a series of factors beyond the control exercised by the family business in the BOD. These factors include characteristics specific to BODs, such as gender diversity, as well as attributes of the companies, such as age, size, profitability and industry.

Gender Diversity in the BOD and Internationalization

Research points to gender differences in risk aversion, competitiveness, decision-making, and trust [8], which serve as a basis for arguing that women’s behavior in BODs differs from that displayed by men, which affects organizational results.

There is extensive evidence in the international literature that the presence of women in the BOD contributes to a more participatory decision-making style [31], which increases the likelihood of making strategic changes, including internationalization. Some studies indicate that gender diversity in BODs adds functional experience to them, which improves the effectiveness of complex decisions [3].

However, women are generally more risk-averse than men, so their presence on boards could reduce support for internationalizing companies [24,31]. The difficulty in accessing a seat on the board of a family business, which is traditionally reserved for the male heir, means that the positions of female directors tend to be more conservative and secure. Furthermore, women who participate in boards—especially if they are part of the family business (which is generally the case)—tend to pursue family goals rather than business goals, which tends to discourage internationalization [55].

Some other authors such as [56] argue that there are actually no significant differences in the behavior of men and women in BOD. They are based on the analysis of motivations, general personality traits, behaviors and attitudes.

Company Age and Internationalization

The age of a company influences the internationalization process. Younger companies are more flexible and versatile and therefore have a greater tendency toward globalization. They also tend to be managed with less risk aversion, given their short business history, which favors venturing into international projects [57].

However, evidence also indicates that veteran companies are more likely to operate in foreign markets, due to their more solid structure and more competent employees. The experience and tenacity of an established company, its local positioning, size, and maturity are elements that can generate trust and foster an internationalization strategy [41].

Company Size and Internationalization

Studies generally show that firm size is positively related to the extent of its internationalization. The limited resources of relatively smaller firms and their lower ability to take advantage of economies of scale are some of the reasons why larger firms have a greater tendency toward internationalization [58]. As firm size increases, so do financing options and the possibilities of hiring highly effective employees; this fosters a more favorable environment for internationalization [37].

However, while traditionally businesses with international activities were exclusively reserved for large companies, this has been changing. New “born global” firms are increasingly emerging, whose key resource for internationalization is specialized human resources [59].

Profitability and Internationalization

The relationship between family business profitability and internationalization is a line of research that has not been sufficiently analyzed, and it presents significant potential for development [1,20,60]. Profitability and internationalization are two concepts that frequently appear interrelated (i.e., there is endogeneity); the question arises as to whether companies internationalize to become profitable and competitive or whether they seek to be profitable and competitive to internationalize [61]. Furthermore, globalization brings advantages and disadvantages for family businesses, so the impact of internationalization on the value of these firms is not trivial.

Industry and Internationalization

The industrial sector in which a family business operates is another factor that may explain the propensity to internationalize. Some sectors are more globally visible, with greater ties to external companies and greater incentives to internationalize [49]. Traditionally, the telecommunications and manufacturing sectors have been more exposed to internationalization, compared to other sectors such as services (except finance) and healthcare [56].

3. Materials and Methods

3.1. Sample

For this research, a database was constructed from the annual reports of 89 companies listed on the Mexican Stock Exchange (BMV), published from 2009 to 2016 (eight years). Financial corporations were excluded from the analysis because they have a different shareholding structure. These years allow for the study of both normal periods and periods of financial crisis.

Mexican companies are distinguished by a high degree of ownership concentration [12]. Following various authors, for this research, a family firm was considered one where more than 50% of the shares are held by the founder or their family members [62]. This percentage is higher than that typically observed in the international literature. In this study, the concepts of family ownership and family business are closely linked but not identical. We define a family business as one that combines (a) family ownership—measured by majority equity control—and (b) family involvement in governance through board representation. This definition aligns with the Mexican institutional context, where ownership concentration typically implies managerial and strategic control by the owning family [12,62]; in fact, all of these companies have family members serving on their boards, and nearly 90% of board chairs are also members of the owning family. Accordingly, when the term family business is used throughout the paper, it refers to firms meeting both conditions.

Family businesses listed on the BMV (Mexican Stock Exchange) for at least one year between 2009 and 2016 were considered. Of the total number of companies listed on the BMV during this period, 58% met the criteria specified above. This equates to 51 companies and 326 observations for an unbalanced panel.

3.2. Variables

Three types of variables were constructed: dependent, explanatory, and control. The dependent variable refers to the internationalization of the family business (IEF). This is expressed as a dummy variable, taking the value 1 when the company has subsidiaries outside of Mexico and zero otherwise, based on the information disclosed in annual reports of firms listed on the Mexican Stock Exchange. This definition is consistent with prior research on emerging-market family firms (e.g., [32]).

Independent variables are those that impact the control exercised by the family business over the BOD and that can influence the decision to internationalize. These are as follows:

• Share of the owning family in the BOD (CF). This is obtained by dividing the number of board members who are members of the family business by the total number of board members, taking into account the similarity of surnames [63].
• Board Independence (IND). This is expressed as the proportion of independent board members (according to the BMV classification) among the total number of board members.
• Duality of the BOD President (DU). This refers to the situation in which the same person holds both the CEO and the BOD President positions. This variable is constructed categorically, with a value of 1 indicating duality and 0 otherwise.
• Tenure of the BOD Chair (TEN). Number of years the BOD Chair has held their position, taking 2009 as the initial year (or another year if there was a change of Chair between 2009 and 2016). As a robustness test, a dummy variable was considered indicating whether there was a succession of BOD Chairs in a given year. This variable allows for a more in-depth analysis of the impact of leadership renewal on openness to international markets.
• Concentration of ownership (CP). The higher percentage of common shares held by a single party (or family business).

The following are considered as control variables in the decision to internationalize family businesses:

• Gender diversity in the Board of Directors (GE). Number of women serving as board members (based on their first name) divided by the total number of board members. There are gender differences in risk perception, management practices, and strategic decision-making. The literature mentions that gender diversity favors strategic perspectives related to internationalization [3].
• Company Age (ANT). Company age in years. More established companies have more experience, but they may also be more rigid towards strategic decisions such as internationalization [41].
• Firm size (TAM). Natural logarithm of total assets. Bigger companies have more resources, managerial skills, and access to external financing. The latter increases the odds for internationalization [37].
• Profitability of the company (ROA). Return on total assets—consolidated net income divided by total assets. High financial performance may increase the odds to invest in internationalization. Nevertheless, it can also reduce the need to expand abroad [53,60].
• Industry to which the family business belongs (IN). BMV classification. Companies are grouped into six categories, with a value of 1 if the company belongs to the category in question and 0 otherwise: materials (MAT), industrial (INT), services and non-basic consumer goods (SNB), frequently consumed products (CFR), healthcare (SAD), and telecommunications (TEL). There are differences in internationalization according to industry. For instance, industrial and telecommunications usually have greater degrees of internationalization compared to the rest [49].

Variables were maintained in their original or conventional units following prior studies, as this facilitates interpretation and comparison.

3.3. Methodology

There are several estimation methods that can be used when binary dependent variables (dummies) are present. The most common are the probit model and the logit model. The difference between the two relates to the cumulative distribution function of the error term: probit (standard normal cumulative distribution); logit (logistic—similar to the normal, but with thinner tails) [64]. The choice of a probit or logit method can be quite arbitrary. However, there is no problem in selecting a probit or logit method as long as they provide similar results, and this is the case in the present work. Therefore, a probit model is presented in this study.

This model can be expressed with the following equation, considering the variables presented above:

$$\begin{array}{c}{IEF}_{it}= {\alpha }_0+{\alpha }_1{CF}_{it}+ {\alpha }_2{IND}_{it}+ {\alpha }_3{DU}_{it}+ {\alpha }_4{TEN}_{it}+ {\alpha }_5{CP}_{it}+ {\alpha }_6{GE}_{it}+ {\alpha }_7{ANT}_{it}+\hfill \\ {\alpha }_8{TAM}_{it}+ {\alpha }_9{ROA}_{it}+{\alpha }_{10}{MAT}_{it}+ {\alpha }_{11}{INT}_{it}+ {\alpha }_{12}{SNB}_{it}+ {\alpha }_{13}{CFR}_{it}+{\alpha }_{14}{SAD}_{it}+{\alpha }_{15}P1+\hfill \\ {\alpha }_{16} P2+ {\alpha }_{17}P3+ {\alpha }_{18}P4+ {\alpha }_{19}P5+ {\alpha }_{20}P6+ {\alpha }_{21}P7+ {\mu }_{it}\hfill \end{array}$$

(1)

Variables P1…P7 are included to account for year-fixed effects; µ is the random error term; i is the number of family firms considered in the study; and the subscript t is the time.

It should be noted that the telecommunications sector (TEL) and the year 2016 (P8) are not included in the equation, to avoid the problem of perfect multicollinearity.

4. Results

Table 1. Descriptive Statistics.

Variables	Average	Standard Deviation	Min	Max
IEF	0.63	0.48	0	1
CF	0.16	0.22	0	1
IND	0.54	0.17	0.25	0.91
DU	0.28	0.45	0	1
GE	0.06	0.11	0	0.55
TEN	3.70	2.23	1	8
TAM	9.86	2.25	5.50	24.19
ANT	37.94	18.79	9	87
ROA	0.04	0.07	−0.56	0.31
CP	68.10	13.69	50.02	99.20
MAT	0.24	0.43	0	1
INT	0.15	0.36	0	1
SNB	0.16	0.37	0	1
CFR	0.24	0.43	0	1
SAD	0.08	0.27	0	1
TEL	0.13	0.33	0	1

Source: Own elaboration.

presents the descriptive statistics for all the study variables. Family businesses listed on the Mexican Stock Exchange (BMV) tend to focus on the materials and consumer goods sectors. Their profitability, measured by ROA, averages 4%. It is worth noting that internationalization is a common characteristic of the family businesses considered; on average, 63% of them have subsidiaries abroad. As publicly traded companies, they are relatively large and well-established (on average, they have been in the market for 38 years), which could favor this internationalization process. However, it is noteworthy that the average profitability of internationalized companies (ROA of 3.6%) is statistically equal (at the 10% level of significance) to that of firms that do not have subsidiaries abroad (ROA of 4.7%).

The concentration of ownership in the hands of family businesses is particularly high in Mexico. The data from this research show that, on average, families hold 68% of share control. However, the trend is for only 16% of board members to belong to these owning families. The vast majority of board chair positions are held by members of the owning families, who are rarely replaced; therefore, for the eight years considered, the average tenure in the position of chair is four years. The professionalization of the family businesses in question is evident in the high proportion of independent directors (average 54%), which far exceeds the 25% minimum established by the Securities Market Law. The high degree of board independence complies with the stricter regulations of the stock exchanges operating in more developed economies. 30% of the family businesses surveyed are listed on the New York Stock Exchange, issuing securities through American Depositary Receipts (ADRs), so this result is expected.

Regarding other characteristics of BOD members, it is observed that both duality and the inclusion of women in BODs are rare practices. Duality occurs on average in only 28% of cases. Furthermore, on average, only 6% of BOD seats are held by women, and none of them hold the position of President.

Table 2. Correlation Matrix.

	IEF	DU	CF	IND	GE	ROA	TAM	ANT	CP	TEN
IEF	1.00
DU	−0.14	1.00
CF	−0.27	0.17	1.00
IND	0.16	0.00	−0.32	1.00
GE	−0.14	0.19	0.52	−0.14	1.00
ROA	−0.09	−0.04	−0.01	0.04	0.11	1.00
TAM	0.30	−0.18	0.05	0.02	0.08	0.19	1.00
ANT	−0.05	0.15	−0.03	0.04	0.09	−0.04	0.12	1.00
CP	−0.13	−0.22	0.08	−0.11	0.16	0.07	0.24	0.11	1.00
TEN	0.06	0.04	0.10	−0.17	0.02	−0.02	0.12	0.20	0.14	1.00

Source: Own elaboration.

shows the correlation matrix of the variables used for the analysis, excluding the industrial sectors.

The strongest correlation is between female participation in boards (GE) (variance inflation factor of 1.71) and the participation of board members who are members of the family business (CF) (variance inflation factor of 1.62). However, the variance inflation factors are less than 10; therefore, multicollinearity does not require any additional treatment.

This association is consistent with prior research showing that women’s board appointments in family firms often occur through kinship ties rather than through external labor markets, particularly in environments with concentrated ownership [51,55]. In this context, female participation may reflect family involvement in governance more than board professionalization, which helps explain its weak independent effect on internationalization.

5. Discussion

The proposed econometric model allows us to investigate whether the probability of adopting an internationalization strategy in family businesses listed on the BMV depends on the effective control exercised by the family business within the BOD.

The results obtained from this probit model are presented in

Table 3. Econometric Results of the Probit Model.

Variables	Coefficients		Standard Error
Constant	−2.68	***	1.03
CF	−2.45	***	0.54
IND	1.11	*	0.60
DU	−0.08		0.24
GE	0.33		1.18
TEN	0.31	***	0.08
TAM	0.44	***	0.07
ANT	−0.02	***	0.01
ROA	−6.73	***	1.73
CP	−0.03	***	0.01
MAT	−0.84	**	0.36
INT	−0.47		0.41
SNB	−1.34	***	0.41
CFR	−0.36		0.36
SAD	−2.55	***	0.63
P1	1.81	***	0.54
P2	1.78	***	0.51
P3	1.63	***	0.47
P4	1.41	***	0.45
P5	0.88	**	0.41
P6	0.60		0.39
P7	0.28		0.40
R-squared	0.40
LR Statistic	168.09
Prob (LR statistic)	0.00

*** Significant at 1%, ** at 5%, * at 10%. P1…P7 are the periods, included to account for year-fixed effects. Source: Own elaboration.

below:

The goodness-of-fit of the econometric model is assessed using the LR statistic. This test tests the null hypothesis that all coefficients, except the constant, are zero. The p-value for this test is 0, so the null hypothesis is rejected at the 1% significance level; that is, the variables considered as a whole are associated with the likelihood of family business internationalization.

Regarding the independent and control variables, CF, IND, TEN, CP, TAM, ROA, and ANT are significant. Regarding seniority, it is worth noting that when considering the succession variable, it is confirmed that a recent leadership renewal is associated with a lower probability of internationalization, reinforcing the idea that accumulated knowledge and institutional trust are key factors for global expansion [65].

The empirical results indicate that H1 was supported, as a higher presence of family directors is negatively associated with internationalization. H2 was supported too, given the positive and significant effect of board independence. H3 was not supported, as CEO duality shows no statistically significant relationship with internationalization. H4 was supported, since longer chair tenure increases the likelihood of international expansion. Finally, H5 was supported, as ownership concentration in family hands exerts a significant negative effect on internationalization.

This is in line with the literature indicating that family entrepreneurs are more risk-averse, making them less likely to support the implementation of complex strategies such as internationalization [17,32]. In family firms listed on the Mexican Stock Exchange (BMV), families own an average of almost 70% of the shares, which is why their members are especially cautious when making strategic decisions that could put family assets at risk. Given the high shareholding of family businesses in Mexico and their consequent risk aversion, the greater participation of independent members in the board of directors can increase the likelihood of internationalization for these firms [3,40]. Independent directors favor less centralized decision-making by the family business and reduce the conservative stances of family directors. Likewise, as the seniority of the BOD Chair increases (whether they are part of the family business or not), their experience and the trust placed in them by members of the family business increase, thereby increasing their control over the firm’s strategic decisions. Greater experience improves the skills to resolve complex situations, prioritize opportunities, and give less importance to threats, which reduces risk aversion and could increase the willingness to venture into international projects [46,48].

Significant differences in internationalization are also evident depending on the sector to which family businesses belong and the year in question. It is observed that, compared to TEL, internationalization is less likely to occur in the MAT, SNB, and SAD sectors. On the other hand, the propensity to internationalize decreases over time, beginning with the 2009 financial crisis and continuing through the years of economic recovery. This, coupled with the fact that the most profitable companies are less inclined to internationalize, indicates that internationalization in the family businesses considered is a reaction process to survive environmental challenges [66]. This is more feasible, as the results indicate, in large companies with greater resources. It is also observed that as the age of companies increases, the probability of them internationalizing decreases, which could be explained by the greater risk aversion and lower flexibility of mature companies [57].

Finally, it is found that DU and GE are not related to the probability of internationalization of family firms listed on the BMV.

While the results suggest that internationalization in Mexican family firms often emerges as a reactive mechanism to declining profitability or economic crises, this interpretation should not be understood as exhaustive. From a broader theoretical perspective, the decision to internationalize may also reflect proactive behavior driven by the pursuit of socioemotional wealth preservation [6] or the deployment of unique family-based resources and capabilities consistent with the resource-based view [5]. Recognizing these complementary explanations provides a more nuanced understanding of family firms’ strategic motives and situates the present findings within the multi-theoretical framework that characterizes contemporary research on family-firm internationalization.

From a practical perspective, these findings have implications for policymakers and stock exchange regulators seeking to enhance the competitiveness of family firms in emerging markets. The evidence that board independence fosters internationalization suggests that governance codes could encourage greater participation of qualified independent directors with international experience. Strengthening disclosure requirements and training programs for independent board members may also help mitigate excessive family control, promote strategic openness, and facilitate access to global markets. In turn, these actions would align with broader public policy objectives aimed at fostering innovation, diversification, and sustainable growth among listed family enterprises.

6. Conclusions

Although family businesses are the driving force of global economies, they have been little studied in emerging economies such as Mexico. Existing research has shown how certain CEO traits influence corporate outcomes. However, few studies for Latin American economies focus on the control exerted by the family over board decisions and how various characteristics of these boards and their members can influence the positions of the family, which have implications for decisions such as internationalization. This paper examines this topic, considering family businesses listed on the Mexican Stock Exchange (BMV) during the period 2009–2016.

The study examines the association between the likelihood of having subsidiaries outside Mexico and variables related to the family or independent nature of the members participating in the BOD, the concentration of ownership in the hands of the family business, and the seniority and duality of the BOD Chair. Evidence is found that, in general, family directors of these companies are not in favor of internationalization, which is framed within the concept of familiness. Their measured stances regarding the risk posed by a strategy of this nature are reinforced as family ownership increases. However, these conservative attitudes are explored as the degree of independence of the BOD and the seniority of the BOD Chair (whether part of the family or not) increase. Independent BOD members can contribute international knowledge to family businesses, in addition to external experience and managerial skills that positively influence the likelihood of venturing into global projects. Furthermore, the length of tenure of BOD Chairs implies an accumulation of knowledge and experience that leads to their contributions weighing more heavily in the strategic decisions of family businesses. Time improves the ability to better understand and manage the complexities associated with internationalization, which increases the likelihood of international entrepreneurship.

The results obtained control for time periods, family firm profitability, industrial sector, firm size and age, and gender diversity of the BOD. Significant differences are found in the likelihood of internationalization based on all of these variables, except for gender diversity. It is worth noting that the greater the profitability (measured by ROA) of the family firms studied, the lower the likelihood of having subsidiaries abroad. Furthermore, as time passes and a period of crisis progresses to a normal one, the likelihood of internationalization of these firms decreases. This suggests that internationalization in the family firms studied is a reaction to adverse situations and not necessarily a strategy during times of prosperity to accommodate greater growth.

A limitation of this study is the definition used for internationalization, which is defined by having foreign subsidiaries. This involves an advanced level of internationalization in comparison with other forms such as exportation [67]. The study can be expanded considering exports as internationalization to account for initial exposure to foreign markets. Another limitation is the identification strategy of family members through surnames [63]. There might be errors due to common surnames, name changes, and incomplete disclosure of family links, among others, underestimating or even overestimating family ties. In addition, the results obtained are for a single country, Mexico, so any reference to other countries should be taken with caution. Furthermore, only large Mexican family businesses listed on the Mexican Stock Exchange (BMV) are considered. The results may be different for mid-sized family businesses, as size is related to the resources companies possess and their ability to compete in foreign markets. Also, listed companies tend to be larger, more professionalized, and subject to stricter governance standards than most private family businesses in Mexico and other emerging markets. Consequently, the dynamics observed here—particularly the positive influence of board independence on internationalization—may differ in smaller, unlisted firms where governance structures are more informal and ownership is even more concentrated. An additional limitation concerns potential endogeneity between profitability and internationalization, as both variables may influence each other. While this study controls key firm-level factors, reverse causality cannot be entirely ruled out. Future research could address this issue using instrumental variables or lagged measures of firm performance and international exposure, which would strengthen causal inference and enhance the robustness of the findings.

Future: research should expand the time frame to include the post-COVID-19 era, once comparable and complete data become accessible. Also, future work stemming from this research could incorporate several Latin American countries and compare different types of companies. Furthermore, this research opens the way for studying the advisability (or otherwise) of internationalization for family businesses in Mexico (and other Latin American countries), as well as their motivations for venturing into international projects.