Does "familiness" enhance or reduce firms' willingness to engage in partnership with rivals? Empirical evidence from South Korean savings banks

Abstract

There is limited understanding of whether 'familiness' strengthens or hampers the firms' willingness to engage in coopetition. In this study, based on a sample of entire 79 savings banks in South Korea, we investigated their ownership structure and participation in the project-financing consortium (coopetition among savings banks) for the period between 2013 and 2019. Unlike the predominant idea that family firms are isolated and seek high independence from external parties, the results show that family-owned savings banks are more involved in collaboration with competitors than non-family counterparts. Also, the positive role of 'familiness' in the coopetition activity is more pronounced as the ratio of outside directors in the company increased. By directly associating the unique strategic characteristics of family firms with the nature of coopetition, this study provides an insight into how 'familiness' can strengthen the firms' participation in coopetition.