This study elucidates the mixed gamble that family firms confront when considering the hiring decisions of non-family executives, that is, a trade-off between the current SEW costs and prospective financial benefits derived from non-family executives. Building on the mixed gamble perspective, we theorize and empirically examine a U-shaped relationship between family ownership and the appointment of non-family executives. We further explore two contingencies at the family and firm level that can alter the weight placed on either side of SEW or financial considerations. Specifically, the U-shaped relationship of the focal relationship is steeper in first-generation family firms by strengthening the negative (positive) effects of low to medium (medium to high) family ownership on the appointment of non-family executives, whereas flatter in family firms that engage in internationalization strategy by weakening the curvilinear relationship. Our hypotheses are supported using a sample of 1,921 Chinese-listed family firms.
