Is Being Conservative at Home Whilst Taking Risks Abroad a Suitable Competitive Strategy? The Case of Spanish Family Firms Internationalizing to Mexico

Abstract

Family firms’ (FFs) importance for industrialized and developing countries and the growing competition has led to an increased interest in knowing how FFs develop their competitive strategies. Since FFs usually have a long-term vision when deciding how to compete, analyzing competitive strategies—usually linked with the long-term—makes even more sense. Furthermore, FFs’ behavior is especially interesting when they have been internationalized. Thus, the purpose of our study is to improve the understanding of the competitive strategies of FFs’ internationalizing to Mexico, namely, exploitation (at a national level) and exploration (at international level). Briefly, a firm’s exploitation strategy is characterized by better-using firms’ existing resources and knowledge, whereas a firm’s exploration strategy involves exploring new ways of doing. Based on data collected from 81 CEOs of Spanish firms that have been internationalized to Mexico, we use partial least squares structural equation modeling (PLS-SEM) technique. We conclude that FFs’ exploitation strategy (at a national level) has a positive impact on firms’ exploration strategy (at international level). In other words, being more efficient and leveraging current knowledge at a national level help to pursue opportunities internationally actively.