Our first test involves the relationship between the scope of internationalization in FFs and its two explanatory variables FAI and DLFF. Our second, given the possible differences in family firms, i.e., multinational versus domestic, and high versus low family activism, our aim is to analyze whether the relationship between leverage and economic value creation and the explanatory variables is different in each subsample.
DLFF has a significant negative influence on economic value creation in both multinational FFs and domestic FFs, which partially confirms our third hypothesis, H3, since, contrary to expectations, it has a negative influence on leverage in domestic FFs.
Together with ownership concentration, we also analyzed DLFF (the lifecycle duration) and the FAI as basic determinants of economic value creation and international diversification in FFs.
Our review of previous research suggested that, as well as ownership structure, other variables associated with the exploitation of intangible assets (capacity to innovate, capacity to detect growth opportunities), DLFF, and family activism may provide the foundational pillars for economic value creation, survival, and international diversification in FFs.
Firstly, we find that there is a linear relationship in family firms between the scope of internationalization and the variables for family activism and DLFF. This appears to indicate that a certain degree of family activism (which increases the level of information asymmetry) drives managers towards expansion into foreign markets in an attempt to escape from over-controlling family shareholders and to diversify risk.
However, the DLFF presents a negative impact on economic value creation.