Abstract
Our study focuses on United States service providers over a period of ten years to examine the impact of market distance and cultural differences on family firms' internationalization efforts. While extant research shows numerous benefits to internationalization, the effects of geographical and cultural distances in the context of family firms have been overlooked. We argue that family firm efforts to expand into international markets are influenced by geographical and cultural distances. Specifically, service providers incur higher agency costs due to stronger needs for monitoring and communication, and lower willingness to give up control. Such position reflects family firms' reluctance to enter new markets that are marked by higher cultural differences and geographic distances. However, we also find that family firms display a willingness to increase the intensity of their internationalization efforts once a new market is entered. We show that family ownership negatively impacts a firm's internationalization, and geographic and cultural distances amplify this negative effect.