Entrepreneurial Orientation and Sustainable Development in Family Firms: Evidence from SEM and fsQCA

This study examines how family governance characteristics and entrepreneurial orientation are associated with sustainable development in family firms. The article addresses a research gap in the family business literature, where sustainable development is often analysed through single governance factors or linear relationships, while less attention is paid to the combined role of entrepreneurial orientation, family control, succession, board composition, and generational stage. To address this gap, the study combines latent structural equation modelling (SEM) with fuzzy-set qualitative comparative analysis (fsQCA). Entrepreneurial orientation is modelled as a latent construct measured by risk-taking, innovativeness, proactiveness, competitive aggressiveness, and autonomy, whereas sustainable development is measured through social, economic, and environmental dimensions. The SEM results show that entrepreneurial orientation is the strongest predictor of sustainable development in family firms. At the same time, family governance variables explain only limited variation in entrepreneurial orientation, indicating that entrepreneurial behavior does not result automatically from family ownership, family involvement in management, succession planning, or generational stage. Among the additional direct predictors of sustainable development, board gender diversity, succession planning, and firm size show positive but comparatively modest associations. Bootstrap analysis of the indirect effects based on 2000 resamples provides evidence of an indirect association through entrepreneurial orientation only for firm size, rather than for family governance characteristics generally. The fsQCA results complement the SEM findings by showing that high sustainable development is associated with multiple configurations of conditions. The most recurrent empirically successful configurations combine high family ownership, family dominance in the board, and high entrepreneurial orientation, while succession planning, gender diversity, and generational stage differentiate alternative configurations. Overall, these findings suggest that entrepreneurial orientation represents a strong strategic correlate of sustainable development, whereas family governance characteristics are more evident as elements of configurational contexts than as uniform net predictors.