Abstract
We investigate entrepreneurial activities in family-owned businesses (FOBs) in relation to environmental munificence and performance gaps by integrating entrepreneurial orientation and socioemotional wealth perspectives. Using a panel of Italian firms (2006-2016), we show that family firms engage in risky entrepreneurial activities when environmental munificence is high. In adding performance gap to environmental munificence, we unexpectedly find that both high environmental munificence and performance above aspiration as well as low environmental munificence and performance stimulate entrepreneurial activities. However, only FOBs pursuing entrepreneurial activities during bad times reap the rewards of their risk-taking.