Institutional settings and local embeddedness of European Entrepreneurial Families: An inter-regional comparison

Abstract

The interaction between institutional settings and Entrepreneurial Families (EFs) is two-fold. Extant literature has attempted to understand how institutional settings can affect Family Businesses’ embeddedness. Both perspectives are complementary and necessary to recognise that EFs are not only locally embedded in their territories, but they are also entrenched in institutions. Despite this, how different institutional settings impact on EFs’ local embeddedness remains unexplored. To fill this gap, we combine institutional theory and family business research to perform a qualitative investigation. Drawing on the Varieties of Capitalism institutional categorisation, an exploratory study is carried out by including four European regions from countries that are positioned as a Coordinated Market Economy (CME) (Germany), a Liberal Market Economy (LME) (United Kingdom) and two cases of Mediterranean capitalist system (France and Spain). 43 semi-structured interviews were conducted across the regions and analysed through an open-coding process. Findings unveil that EFs’ local embeddedness is conditioned by different institutional settings in different ways, namely through codified mechanisms (CME and Spain) and through nonformalised mechanisms (LME and France). These are unfolded in 20 mechanisms, which contribute to territorial policies adjustments depending on the category of institutional setting where EFs are locally embedded.