Family Ownership and Environmental Sustainability Practices: An Emerging Economy Perspective

Abstract

ABSTRACT Integrating agency, socioemotional wealth, and the resource‐based view theories, this study investigates the relationship between family ownership concentration and firms' environmental sustainability practices (ESPs) in a fast‐growing emerging market—Egypt. We examine the dual role of family ownership as a determinant of ESPs and moderator of the relationship between ESPs and some of its conventional firm‐level predictors—the adoption of strategic management practices, corporate governance, innovation, and social capital. Using a cross‐sectional dataset of 1932 private manufacturing firms derived from the Egypt 2020 World Bank Enterprise Survey, we employ logistic regression and marginal effects analyses to test our hypotheses. We also use a novel regime‐generating approach to econometrically estimate the optimal family ownership threshold beyond which a firm exhibits ESPs patterns characteristic of family‐owned businesses. We find that family ownership exhibits a U‐shaped association with ESPs adoption, yet with persistently negative effects. Beyond 75% ownership concentration, it significantly reshapes ESPs predictors, particularly for innovation and social capital. Our findings advance the scholarly debate on environmental sustainability in family‐owned businesses and provide actionable insights for managers and policymakers seeking to enhance corporate and national sustainability performance in emerging markets.