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Family firms and regional context: literature overview, agenda framing and future research directions

Adjei, Evans Korang,Amato, Stefano,Basco, Rodrigo,Suwala, Lech

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Adjei, Evans Korang; Amato, Stefano; Basco, Rodrigo; Suwala, Lech Article — Published Version Family firms and regional context: literature overview, agenda framing and future research directions Review of Regional Research Provided in Cooperation with: Springer Nature Suggested Citation: Adjei, Evans Korang; Amato, Stefano; Basco, Rodrigo; Suwala, Lech (2025) : Family firms and regional context: literature overview, agenda framing and future research directions, Review of Regional Research, ISSN 1613-9836, Springer, Berlin, Heidelberg, Vol. 45, Iss. 1, pp. 1-16, https://doi.org/10.1007/s10037-025-00234-2 This Version is available at: https://hdl.handle.net/10419/323279 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. http://creativecommons.org/licenses/by/4.0/ EDITORIAL https://doi.org/10.1007/s10037-025-00234-2 Review of Regional Research (2025) 45:1–16 Family firms and regional context: literature overview, agenda framing and future research directions Evans Korang Adjei1· Stefano Amato2· Rodrigo Basco3· Lech Suwala4 Accepted: 12 February 2025 / Published online: 14 March 2025 © The Author(s) 2025 Abstract Recently family firms seen a delicate renewed interest in regional science, regional studies and economic geography and similarly, spatial and regional contexts have been addressed in family business studies. Those strands are driven by interest in the heterogeneity of family firms as the most common type of organization all over the world (family spatialities) and the heterogeneity of spatial and regional context as a significant selection filter for the behavior and performance of family firms (spatial familiness). This editorial addresses these unique settings of family firms and the nature of spatial/regional contexts in a greater depth, by providing a concise literature overview on contextualizing research, by presenting a star shaped model to systemize research around spatial and regional contexts, and by suggesting further research directions. Our proposed star-shaped model frames a holistic view on spatial and regional contexts though a scientific agenda that differentiates between theoretical explanations and modelling (spatial concepts), empirical descriptions and analyses (spatial factors, spatial structures, spatial settings), and policy recommendations All authors have contributed equally to the work (e.g. organization pertinent sessions at conferences (EURAM, RSAI, RSA, GCEG), acquiring potential authors, handling and reviewing papers, writing the editorial). For pragmatic reasons authors appear in alphabetical order. Lech Suwala [email protected] 1Centre for Regional Science, Umeå University, Samhällsvetarhuset, Plan 5, 901 87 Umeå, Sweden 2Department of Economics and Management, University of Trento, Via Inama 5, 38122 Trento, Italy 3Sheikh Saoud bin Khalid bin Khalid Al-Qassimi Chair in Family Business, American University of Sharjah, PO Box 26666, Sharjah, United Arab Emirates 4Department of Urban and Regional Economics, Technical University of Berlin, Straße des 17. Juni 152, 10623 Berlin, Germany K 2E. K. Adjei et al. (spatial policies). These elements are shaped by scalar (spatial frames) and temporal frames (spatial processes). Most of these spatial building blocks and their interplay are explored by the articles in this special issue. Keywords Family firms · Spatial/regional context · Spatial familiness · Family spatialities “The family business is good for the country, because people spend their entire lives building a business that in turn serves the community” (Alcorn 1981, p. 18) 1 Family firms and regional context: a stony, but promising path It is almost beyond expectations that the family firm, as the most common form of organization around the world (Suwala et al. 2024) has been mostly neglected in regional science, regional studies and economic geography (Stough et al. 2015; Amato 2020; Basco and Suwala 2020). Similarly, spatial and regional contexts have not been appropriately addressed in family business studies (Wright et al. 2014; Basco 2015; Basco and Suwala 2021). There are various reasons for this. In the above-mentioned regional disciplines, dominant paradigms around knowledge-based and innovation-driven growing modern and networked societies framed within both the regionalization and globalization have brought interest in local, entrepreneurial, newly born, or regional small and medium enterprises on the one hand, and large, foreign, interor multinational companies on the other hand (Scott 1986; Sternberg 1989; Fritsch 1992; Taylor and Oinas 2006). At the same time, idiosyncrasies of family firms—such as ownership, governance, and management—along with fundamental operational and strategic concerns, including firm size and growth, succession, employee relations, and entrepreneurial spirit have been central topics in family business studies as they significantly affect firm behavior and performance (Tagiuri and Davis 1992; Chua et al. 1999; Basco 2013;Daspitetal.2021). Both the ‘middle ground’ and ‘family component’ of firms have been largely overlooked in regional disciplines, as well as external circumstances such as the (regional) context expressed in any type of spatiality in family business studies (Suwala et al. 2024). However, when looking closely at certain early, popular and enduring research streams in both fields, we found evidence that those circumstances have been implicitly acknowledged. Discourses around the Marshallian industrial district and its revival in Third Italy have emphasized the family (firm) in the regional contexts (e.g. Marshall 1920; Becattini 1978). Similarly, pioneering studies in the early years of family business research highlighted an open systems perspective, acknowledging the unique (local and international) contexts in family firms (e.g. Hollander 1983; Gallo and Sveen 1991; Kahn and Henderson 1992). If we align with Yeung and Soh’s definition of the firm as “an organizational unit bringing together diverse social relations in which actors are embedded ... [and] these K Family firms and regional context: literature overview, agenda framing and future research... 3 relationships may be inter-personal relationships, family linkages or simply social ties” (Yeung and Soh 2000, p. 311), and center and enlarge this definition around the family component—which is exactly what Walther Isard et al. (1969) suggests in his General Theory: Social, Political, Economic and Regional—the following interpretation of family firms emerges. Family firms serve as the main driving force, vibrant agents, and a stabilizing glue in a spatially embedded orchestration of manifold relationships spanning the family, the firm, the local community and often even multiple generations through persistent local roots, spatial proximity and regional identity building. This ‘orchestration of separated working tasks’ and ‘holding together’ (integration) of localized social relationships and spatial arrangements through family (firms) have been recognized a long time ago in regional disciplines. Alfred Marshall, in his classical take on (pre-)industrial districts, and later researchers within the realm of Third Italy industrial districts during the Fordist crisis of the 1970s and 1980s, highlighted exactly these constellations as successful regionally concentrated production hubs driven by family-owned and highly specialized small and mediumsized firms (Marshall 1920; Becattini 1978). These industrial districts were characterized as “clusters of smallfamily and craft-based firms in the rural areas (...) with petit bourgeois traditions, community-wide social and economic rules, and municipal mercantilist traditions, which are historically sedimented in particular areas” (Trigilia 1990, p. 199) based on “partial division of labour (...) between individual members of the same family, between families, and between neighboring villages, or clans” (Marshall 1920, p. 113). Although the family (firm) was also mentioned in similar spatial settings—e.g. the Wenzhou model or the Gnösjo Spirit (Yeung 2000;Wigren2003; Wei et al. 2007) and partly in the territorial innovation model literature (including innovative milieus, clusters, regional innovation systems, and new industrial spaces, Sforzi 1989; Brinkhoff et al. 2015), the institution of the ‘family’ never achieved a decisive breakthrough. Instead, it was sporadically referenced in studies, intermingled with kinship and friendship relationships and often substituted, paraphrased or blackboxed as cooperation, trust, and reciprocity among spatially proximate economic entities, creating a so-called ‘local atmosphere’ (cf. original Marshallian ideas, Marshall 1890, p. 198; Hansen 1992; Basco and Suwala 2021). In family business studies—a relatively young academic field—(spatial) contexts have been understood as (external) environments in early research (Davis and Stern 1980; Hollander and Elman 1988). One of the first studies to seriously examine the environment (understood as marketplace or macro-system level) is the PhD thesis of Hollander (Hollander 1983, p. 8, 42, 201). Hereby, “three major interactive components: the family, the business, and the environment with (...) relatively permeable boundaries” (Hollander and Elman 1988, p. 159) are envisioned. It was futher apprehended that “the juxtaposition of open-systems theory with family systems theory seems to provide a way of viewing the elephant as a whole” (Hollander and Elman 1988, p. 159). In this realm, the definition by Davis and Stern is helpful according to “a family firm, as a firm operating in a business environment is influenced by the forces of technology, environmental complexity, and uncertainty as any other firm (...) K 4E. K. Adjei et al. external factors, [business] and family issues must be simultaneously accommodated to facilitate survival and growth” (1980, p. 209, add by the author based on the sentences in-between). In a similar vein, Hollander proposes that “a family business consists of two subsystems, the family and the firm, forming a macro-system which is responsive to the environment. Further, it is hypothesized that the application of systems concepts to the interactive process between the family, firm and environment will produce new understandings regarding their interrelatedness” (Hollander 1983, p. 42). These relatively abstract conceptualizations of (spatial or regional) context as (external) environments were originally used as descriptive and ‘containerized frames’ or more precisely, scales (e.g. macro-system or level, Hollander 1983). However, not much rigor has been given to the very nature of (spatial) context in later studies and their existence has been simply taken for granted or paraphrased as ‘home’ for the local context (or environment) (Kahn and Henderson 1992) and as ‘doing business abroad’ for the international context (Gallo and Sveen 1991). This marks an early differentiation of spatial context. Interestingly, only the (international) context (Gallo and Pont 1996;Okoroafo 1999; Graves and Thomas 2004), and to a lesser extent, the related concept of ‘home bias’ or ‘home region focus’ (Gomez-Mejia et al. 2010; Banalieva and Eddleston 2011) has successfully generated a robust research stream that is older than a decade. This stream has often been published within the realm of international business studies and adjacent journals, authored by family business scholars. Today, international(ization) is by far the most extensively examined (spatial) context (e.g. Pukall and Calabro 2014; Arregle et al. 2017; De Massis et al. 2018; Hennart et al. 2019 among many others). 2 The contemporary re-discovery of the regional and family firms’ nexus Following the debate opened by Stough et al. (2015) and later expanded upon by Basco et al. (2021a) to advance the cross-fertilization between family business and regional disciplines, our approach here is to push this discussion forward by shading new light in a twofold and not mutually exclusive manner. Contemporary literature mainly addresses two perspectives when analyzing ‘family firms and spatial/regional context’ (Basco 2015; Basco and Suwala 2020,2021). First, the regional context perspective that deals with ‘family spatialities’ in regional science, regional studies and economic geography. Second, the family firms’ perspective within management, organization and entrepreneurship studies that brings forward the concept of ‘spatial familiness’. ‘Family Spatialities’ refer to the diverse types (e.g., locations, places, landscapes, and territories) and scales (e.g., local, regional, (inter-)national, and global) of spaces, each with a distinctive logic that influences family firm behavior (Seaman 2012; Suwala and Oinas 2012; Basco and Suwala 2020). ‘Spatial familiness’ is defined as a “spatially embedded, distinctive bundle of resources and capabilities arising from family involvement, family aspiration, family-based organizational identity, K Family firms and regional context: literature overview, agenda framing and future research... 5 and family embeddedness in multi-scalar contexts” (own elaboration based on Habbershon and Williams 1999, p. 11; Weismeier-Sammer et al. 2013, p. 174; Basco 2015, p. 267). Both ‘family spatialities’ and ‘spatial familiness’ are the fundamental sources of firm and spatial heterogeneity (Basco and Suwala 2020, p. 194). Against this background, Basco and Suwala emphasize the need for “more interdisciplinary work to address research gaps and exchange insights on theoretical, empirical, and practical grounds to better investigate the phenomena of ‘spatial familiness’ and ‘family spatialities’” (2021, p. 23). This call serves as the foundation of this special issue. To explore these unique settings of family firms and the nature of spatial/regional contexts in a greater depth, we provide a concise literature overview on contextualizing research in this realm before presenting our own framework. Contextualizing ‘research objects’ has recently gained importance within management, organization and entrepreneurship studies in general (Johns 2006; Welter 2011; Hällgren et al. 2018) and family business studies in particular (Wright et al. 2014; Krueger et al. 2021). Various types of contexts have been acknowledged in family business studies, including organizational, institutional, cultural, social, temporal and/or spatial context (Amato et al. 2022; Soleimanof et al. 2018; James et al. 2021). The spatial or regional context or better the link between family firms and spatial/regional contexts, the focus of this special issue, has been approached in manifold ways. To understand our new framework we aim to provide, let us first summarize how the regional context has been addressed so far. Anecdotal tales and consulting experiences (e.g., “family businesses often follow strategies that are narrowly focused on customer needs in local markets” (Gallo and Sveen 1991, p. 183)), assumptions (e.g., “family businesses are more embedded within the regional community than their non-family counterparts” (Bird and Wennberg 2014, p. 424)), Literature-based hypothesis creation (e.g., “family firms appear to be more capable than non-family firms to translate spatially embedded resource endowments into growth performance (...) positive effect of increasing local embeddedness on business growth is higher among family firms in comparison to nonfamily firms” (Baù et al. 2019,p.375)), Model building (e.g., ‘multiple level embeddedness contexts of family firms’ (Basco 2017a, p. 249) or ‘tree model’ where the place attachment of the owning family portrays the ‘local roots’ of the firm (Amato and Patuelli 2023, pp. 57–58)). In a more systemic manner, spatial context is considered as a multi-scalar (Basco 2017a; Selcuk and Suwala 2020), multi-functional (Basco 2017b) and even methodological and theory-building entity (Gomez-Mejia et al. 2020; Amato et al. 2022). Whereas Selcuk and Suwala (2020, p. 6) develop a multi-stakeholder (actor, family, community) and scalar (micro, meso, macro) context framework for migrant family entrepreneurship, Basco (2017b, p. 249) highlights the manifold situational, contingent, and path-dependent facets of context. An interesting approach to spatial context is proposed by Gomez-Mejia et al. (2020, p. 133); they differentiate between ‘context by sampling’, ‘context by comparison’ and ‘context by theorizing’, thereby attributing a non-universal and relational meaning to context beyond black-boxes K 6E. K. Adjei et al. Fig. 1 Star model of family firms and spatial context (own elaboration) and containers for operationalization, as the level of reference (see also Krueger et al. 2021). Against this background, and although there is no coherent framework on spatial/ regional contexts, we aim to systematize, apply, and continue work done by Basco and Suwala (2020,2021), who provide a literature overview on family firms and spatial/regional context. In pursuit of this goal, we propose the following ‘star model’ (Fig. 1). The five prongs of the star and the surrounding circles are equally important, interwoven in reality with permeable borders between internal and external spatial contexts within and beyond the firm, yet they delineate different logics. The three upper prongs (theory, empirics, policy) outline a traditional scientific approach, focusing on description, explanation, and design. In our understanding spatial context serves multiple functions: it enables theoretical explanations and modelling (spatial concepts), supports empirical descriptions and analyses (spatial factors, spatial structures, spatial settings), and informs policy recommendations (spatial policies). These elements are shaped by scalar (spatial frames) and temporal frames (spatial processes). In general, various approaches and perspectives towards spatial/regional context are conceivable. Deductively by tracing the history of thought in regional disciplines or family business studies, or inductively by analyzing papers and articles, given that the nexus is novel. Moreover, depending on the focus, one can adopt a theoretically informed approach (e.g., modeling and identifying for universal circumstances), a practice-based approach (e.g., hands-on experience and management advice), a policy-based approach (e.g., following a certain agenda—growth, employment, well-being), or a combination of these approaches. As there exists literature that addresses each of these prongs in other research (in particular Basco and Suwala 2020,2021, pp. 21–22), we will now focus on investigating the idiosyncratic meaning of each circle for contextualization, with K Family firms and regional context: literature overview, agenda framing and future research... 7 an emphasis on (external) spatial/regional contexts1and cite selected literature to exemplify their significance2. Theorizing context establishes the ontological and epistemological foundations and implies a specific contextual logic for underlying models. In this realm, various concepts of space have been developed and applied in the context of family firms, such as abstract, relative, relational or topical spaces (Suwala 2014,2021;Amato 2020; Basco and Suwala, 2020,2021; Amato and Patuelli 2023) or conceptual, cultural, community, and contingency spaces (Seaman 2012,2013,2015). For example, Krueger et al. (2021, p. 3) use relational space for contextualizing family firms in the Arab word. Empirically investigating context is by far the most extensive strand in literature. Spatial factors and/or variables are primarily used to measure and/or compare contextual dimensions affecting family firms themselves or their impact on a desirable (regional) outcome such as employment (Backman and Palmberg 2015; Amato et al. 2021), innovation (Block and Spiegel 2013; Berlemann and Jahn 2016), productivity (Adjei et al. 2016; Adjei and Eriksson 2021; Amato et al. 2023), exports (Amato et al. 2020; Basco et al. 2023), (regional) performance (Murithi and Beta 2021)or growth (Adjei et al. 2019). The spatial structures or settings strand exemplifies how regional context is influenced by family firms and/or is influencing family firm in specific territorial arrangements such as industrial districts (Cucculelli and Storai 2015; Pittino et al. 2021), networks (Seaman et al. 2017; Ghinoi et al. 2024) and/or clusters (Grashof 2025 in this issue; Mendes et al. 2025 in this issue). Hereby, certain contextual and spatially driven self-reinforcing mechanism (see for overview Suwala 2023) such as (spatial) embeddedness (Basco 2017a, b, 2024; Bau et al. 2019; Selcuk and Suwala 2020; Bichler et al. 2022), urbanization/agglomeration economies (Bannò et al. 2020; Basco et al. 2021b), proximity (Kahn and Henderson 1992; Adjei et al. 2016; Martyniuk and Gierusz 2016) as well as local roots and/or place attachment come into play (Amato and Patuelli 2023; Amato et al. 2024). Politically designing context explores how context such as regional laws, regulations, statues or in general institutions (spatial policies) affect family firms (Glassop and Graves 2010; Basco and Bartkeviˇ ci¯ ut˙ e2016; Ricotta and Basco 2021; Basco 2024; Sacristán-Navarro et al. 2025 in this issue). Conversely, it also examines how family firms shape and influence their local and regional environments, as well as 1Internal spatial (and regional) contexts will be mentioned where applicable. Examples for internal spatial (and regional) contexts to the firm can be the organization and design of the workplace in the factory (e.g. 5S system within lean manufacturing) that allows for the efficient use of space or economies of scale and/or scope (e.g. Suwala et al. 2022). 2It has to be mentioned that most articles encompass more than one type of context. Since we do see a growing overlap between both disciplines, we do acknowledge this new regionally-informed contextual research on family firm and do not separate the origins in the studies as done in Basco and Suwala (2021). A new hybrid generation of researchers such as Adjei et al. (2016,2019) or Amato et al. (2021,2022, 2023) binding both disciplines is moreover on the rise. K 8E. K. Adjei et al. institutions setups, by tailoring spatial policies to their needs (Albers and Suwala 2021a, b; Graffenberger and Görmar 2021; Rietmann 2023). Scales serve as spatial frames for contextualization by sampling in order to delimit spatial entities of investigation. They can span from local (Seaman et al. 2017), regional (Banalieva and Eddleston 2011; Welch et al. 2025 in this issue), national (Chang et al. 2008; Arteaga and Basco 2023; Beck et al. 2025 in this issue), international (Pongelli et al. 2019) or global levels (De Massis et al. 2018). Similarly, micro-, meso-, and macro-levels function as multi-scalar categorization measures (see Basco 2017a, b; Selcuk and Suwala 2020; Basco et al. 2021a). Another approach to spatial structures involves examining specific locations (e.g., Wenzhou, Yeung 2000; Gnosjö, Wigren 2003; sparsely populated regions, Lundberg and Öberg 2021), broader regional classifications (e.g. Europe, Cappelli et al. 2021; Southeast Asia, Samphantharak 2019), or linguistic or cultural areas (e.g. Central-Eastern Europe, Domanska et al. 2023; Latin America, Müller et al. 2018; Iberoamrica, GomezMejia et al. 2020). Time functions as a crucial dimension for establishing temporal frames in contextualizing spatial processes. This dimension adds dynamism to research by incorporating vertical perspectives (e.g. global value chains, Debellis et al. 2024; sourcing strategies, Pongelli et al. 2019) horizontal perspectives (e.g. regional networking, Tuitjer and Küpper 2022) or longitudinal spatial perspectives (e.g. Fernández-Pérez 2002) on family firms. Among the most extensively research topics is the process of internationalization of family firms, which explores determinants, pathways, and outcomes among many other dynamic dimensions (e.g. Gallo and Pont 1996; Graves and Thomas 2008; Arregle et al. 2017; De Massis et al. 2018). In a broader sense, tensions between various spatial frames (home, territory or locality vs. internationalization or globalization) (Baschieri et al. 2017; Kano and Verbeke 2018; Hennart et al. 2019; Bau et al. 2021; Ranfagni et al. 2021) illustrate complex space-time processes. Finally, several models aim to systematically explain the relationship between family firms and regional context, such as the regional familiness model and the spatial management model. These models integrate various building blocks, including spatial factors, processes, concepts, scales (Basco 2015; Suwala 2021; Basco and Suwala 2020,2021). 3 Contributions of the articles in the special issue While diverse in scale and scope, the five studies in this special issue highlight the family business and spatial/regional context nexus. All studies are empirical in nature, leveraging large quantitative datasets through rigorous econometric methodologies and incorporating multiple dimensions of spatial context for their research purposes. The first paper, “Familiar but also radical? The moderating role of regional clusters for family firms in the emergence of radical innovation” by Grashof, examines K Family firms and regional context: literature overview, agenda framing and future research... 15 Hollander BS, Elman NS (1988) Family-owned businesses: An emerging feld of inquiry. 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