Entrepreneurial intention-action gap in family firms: bifurcation bias and the board of directors as an economizing mechanism

Abstract

This study investigates under which conditions entrepreneurial intentions will transform into entrepreneurial actions in a family firm context. Although entrepreneurial intentions are often a good predictor for entrepreneurial activity, intentions will not always lead to the expected action. We aim to explain this intention-behavior gap in family firms by investigating the moderating role of bifurcation bias, defined as the de facto asymmetric treatment of family vs. nonfamily assets. Our results support the argument that bifurcation bias in family firms hinders the smooth transition of entrepreneurial intentions into entrepreneurial actions. Nevertheless, results also support the notion that the appointment of outside directors in the board could serve as an economizing mechanism for bifurcation biased family firms to transform entrepreneurial intentions into entrepreneurial actions.