Abstract

We investigate the mediating effect of entrepreneurship orientation (EO) as one explanation of the inconsistent relationship between professionalization and family firm performance (J. Dekker, Lybaert, Steijvers, & Depaire, 2013). We use employee engagement as a proxy for firm performance due to its consistent positive effect on firm performance (Harter, Schmidt, Agrawal, & Plowman, 2013). Furthermore, responding to Sharma, Chrisman, & Gersick’s (2012) recent call, we test our model in the developing economy context. Finally, following Fang et al.’s (2012) arguments regarding the impact of institutional environment on professionalization effects, we compare the results for listed and non-listed family firms.

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