We ask whether choices aimed at preserving socioemotional wealth (SEW) represent an asset or a liability in family–controlled firms. Specifically, we consider one major SEW–preserving mechanism—having as chief executive officer (CEO) a member of the controlling family—and hypothesize that this choice is (1) an asset in business contexts, such as industrial districts, in which tacit rules and social norms are relatively more important, but (2) a potential liability in contexts like stock exchange markets, where formal regulations and transparency principles take center stage. The results from our empirical analysis confirm these hypotheses.
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