Family business performance: the role of dynamic capabilities, entrepreneurial orientation, and socioemotional wealth

Abstract This study examines family business performance through three theoretical lenses: dynamic capabilities, entrepreneurial orientation, and socioemotional wealth. Data were gathered from 156 Spanish family businesses and interviews with eight family business CEOs. Partial least squares structural equation modeling (PLS-SEM) was used to analyze the data. The results reveal valuable findings. Dynamic capabilities, particularly sensing, seizing, and resource reconfiguration, are critical for navigating dynamic environments and achieving sustainable competitive advantage. Entrepreneurial orientation, defined by innovation, proactivity, and risk-taking, also enhances performance, especially in contexts of technological and digital transformation. Socioemotional wealth, which encompasses family control, social ties, and legacy preservation, influences strategic decision-making but has a weaker effect than dynamic capabilities and entrepreneurial orientation. Collectively, the findings underscore the interplay of adaptability, entrepreneurial strategies, and family values in driving the resilience of family businesses. Spain provides an illustrative context because family businesses represent over 92% of all Spanish firms and include global leaders in the food, fashion, infrastructure, and tourism industries. Insights derived from this study therefore offer valuable implications for family businesses worldwide. Overall, the current study contributes to the research by integrating these three frameworks and highlighting their individual and combined roles in performance optimization.