Research on the internationalization process of family firms has grown in recent years. Yet, what prompts family firms to consider a shift in their internationalization strategy has not been examined. This study explores how family firms decide on shifting from a relatively less complicated exports strategy to outward foreign direct investment (FDI) that involves greater risk and higher resource commitment. This study argues that type of management (family vs. nonfamily) and vulnerabilities (internal and external) determine how family firms undertake strategic shift. Drawing on the mixed gamble perspective and utilizing a sample (n =278) of listed family firms from India, this study finds that, in general, family-managed firms are less likely to undertake the shift from exports to FDI as compared to nonfamily or professionally managed firms. Results further demonstrate that the likelihood of family-managed firms’ strategic shift increases when they experience internal vulnerability (performance below aspirations) as well as external vulnerability (rising foreign competition). The study concludes by discussing the theoretical and managerial implications of the findings and highlighting fertile avenues for future research.
