Abstract
The present investigation delves into the relationship between capital expenditure and performance in Italian family firms. We adopt the socioemotional wealth (SEW) preservation perspective to study the decision of family firms to engage in capital spending based on firm performance. Our empirical investigation of a pooled sample of family versus non family firms suggests that family businesses pursue more intensive capital expenditure when experiencing better past performance. Furthermore, family firms with lower past financial performances make better investment decision, when measured in terms of impact on their subsequent financial performance.