Innovativeness in family firms: drivers of innovation and their mediating role

Extant literature on the effects of family involvement on innovativeness has so far produced controversial results. While some papers argue that family firms are less innovative than non-family firms, other studies make a case for the exact opposite. So far most studies have tackled this question by taking a particularistic perspective. In this paper, however, we employ a broader approach and consider multiple drivers of innovation as a starting point. Drawing on the idiosyncrasies of family firms, we then predict a difference between family firms and non-family firms with regard to innovation drivers. Our second hypothesis proposes that the effect of family involvement on a firm’s innovativeness is mediated by several drivers of innovation. We test our hypotheses using a data set of 184 Austrian companies. Our results indicate significant differences between family firms and non-family firms for six drivers of innovation. Moreover, our findings suggest that there is a multitude of factors that serve as mediators of the relationship between family involvement and innovativeness.