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This article explores the effect of entrepreneurial orientation (EO), governance and geographic location on the performance of Palestinian family-owned businesses.

This quantitative study uses data collected in the fall of 2022 from 180 Palestinian-owned family companies – 90 were located in Palestine and the other 90 were located in the USA. Using R software, multiple regression analysis was employed to examine the relationships between the constructs that formed the study's conceptual framework.

The results indicate that (1) the risk-taking, innovation and proactiveness dimensions of EO have a significant positive impact on the performance of Palestinian family-owned businesses; (2) Governance moderates the EO dimensions of risk-taking and proactiveness on the performance of Palestinian family-owned companies and (3) geographic location does not moderate the relationship between the EO and performance of Palestinian-owned family businesses.

The current intensified conflict in Palestine warrants exploring the role Palestinian family-owned businesses worldwide can play in rebuilding the local economies of Gaza and the West Bank. The following years will be crucial in determining how proactive risk-taking and innovation will support regional recovery and augment the entrepreneurial and reinvestment capacity of diasporic and home country-based Palestinian family-owned firms. Thus, our study into factors that might enhance these businesses' performance and growth potential is pertinent. A further contribution of this study is new insight into the particularities of Palestinian family-owned businesses, augmenting general theories associated with ethnic and diasporic entrepreneurship.

Family businesses (FBs) have a high rate of extinction through generations; hence, it is crucial for their owners to give succession planning top priority. In light of this, the study aims to determine the key factors that significantly influence effective succession.

This study illuminates the crucial factors of effective succession among Palestinian FBs (PFBs) by relying on the relay race model. A self-administered questionnaire used to gather the data; partial least squares structural equation modeling was used to analyze the data obtained from 282 participants based on the two-step approach to evaluate structural equation models. In the first analysis stage, measurement items’ validity and reliability were tested. Convergent and discriminant validity tests for the measurement (outer) model were performed. The square root of average variance extracted (AVE) and the correlation between latent constructs were compared to evaluate the discriminant validity. The structural (inner) model and hypotheses were tested in the second analysis stage. The research model’s hypotheses relations were predicted using the coefficient of determination (R²).

As they draw attention from existing and future founders and incumbents of FBs that successfully complete a succession process within the Palestinian setting, the findings offer a deeper understanding of the primary familial succession factors. Where it is important to place a focus, among other things, on familial bonding and trust placed in the next generation, as well as on next generation’s credentials and capabilities, financial and operational performance of FBs, next generations desire to join the business beside the job satisfaction and the financial returns they will earn. Additionally, findings show that the size of the FB and generation, as well as the incumbent’s age and education, have positive impact on the incumbents’ willingness to step down.

The value of this study comes from the following: first, to the best of the authors’ knowledge, it is the first that conduct a quantitative analysis on succession factors, the thing that adds value to the PFBs literature. Second, this study adheres to its own willingness scale, as it aims to analyze other success factors that PFBs are not fully aware of, particularly, family bonding and trust, the qualifications and capabilities of the next generation, plus financial and operational performance of the FB.