1 Introduction
2 Major topics in family firm innovation research
3 Theoretical framework: family firm specific resources
4 Methodology
Source | Search terms | Search fields | Filters | Results |
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Search strategies for published and peer-reviewed papers | ||||
Business source premier | “family firm” AND innovat* | Title and abstract | Peer-reviewed Articles | 320 |
Business source premier | “family business” AND innovat* | Title and abstract | Peer-reviewed Articles | 322 |
Google Scholar | “family firm” AND innovation | Title | n.a | 86 |
Google Scholar | “family business” AND innovation | Title | n.a | 176 |
JSTOR | “family firm” AND innovat* | Abstract | Articles | 8 |
JSTOR | “family business” AND innovat* | Abstract | Articles | 15 |
Gross search results | 927 | |||
Data cleaning | ||||
Manual removal of non-peer reviewed Articles from Google Scholar searches | − 177 | |||
Removal of duplicates | − 240 | |||
Unique peer reviewed Articles | 509 | |||
Exclusion of papers beyond scope | ||||
Papers deemed irrelevant after reading the title and abstract | 386 | |||
Papers deemed irrelevant after reading of the complete article as they… | ||||
… did only conceptualize and operationalize corporate governance constructs | − 28 | |||
… used resources as part of overall argumentation but did not investigate resources | − 23 | |||
… did not empirically investigate primary data | − 17 | |||
… used innovation only as moderator of other performance outcomes | − 5 | |||
… investigated highly specific types of innovation beyond general innovation logic | − 3 | |||
Papers included in this review | 48 |
Author and year | Sample and method | Aim of study | Family-specific resources |
---|---|---|---|
Human capital | |||
Arzubiaga et al. (2018) | n = 230 | Entrepreneurial orientation and innovation in family SMEs | More human capital in TMT leads to higher exploratory innovation Higher family influence has negative impact on exploratory innovation External involvement has positive effect on exploratoy innovation |
Bergfeld and Weber (2011) | n = 654 | Owning families’ influence on the innovativeness | Professionalisation of innovation management through additional external human capital leads to more innovation Collaborating with managers and advisors that were not family members was dedicated to acquiring additional managerial and technical knowledge which helped the owning families to multiply the effect of their decisions and intentions within their firms and in intercompany collaborations |
Calabrò et al. (2021) | n = 478 | Relationship between human capital (employees’ experience, knowledge and technical skills, managerial talent) and innovativeness (propensity to innovate) | Positive relationship between human capital and family firm innovativeness Family board ratio positively moderates the relationship between human capital and innovativeness The moderation effect is weaker when multiple family generations are actively involved in the firm |
Chen and Hsu (2009) | n = 369 data set of TSE- and OTC-listed elecronic Taiwanese firms | Examines relationship among family ownership, board independence, and R&D investment | High family ownership increase R&D investment when the CEO-chair roles are seperated Negative relationship between family ownership and R&D investment, suggesting that because of their conservatism or their efficient use of R&D investment Firms with high family ownership use less R&D in relation to firms with low family ownership |
Chirico and Salvato (2016) | n = 592 Swiss family firms; ffs registered with the Chamber of Commerce of one canton in the Swiss Confederation | Examine how product development is determined by the controlling family’s capability of knowledge internationalization, which denotes family members' collective ability to recognize, assimilate, and exploit each other’s knowledge for product development | Quality of human capital is essential, but equal emphasis should be placed on how the knowledge endowment of individual family members is internalized across the family through social and affective mechanisms Family social capital influence a family firm’s ability to internalize its members’ knowledge for PD Effects depends on which generation controls the firm Later generations enhance the positive effect of social capital, reduce the influence of affective commitment |
De Massis et al. (2016b) | n = 6 family SMEs multiple cases; to develop explanatory theory about phenomena that have not been well-explored from consitent patterns of data using replication logic | Investigate the design decisions that fit family and business logics to create high-performing NPD programs | Cross-functional teams of dedicated human resources which have functional interaction on a full-time basis during the course of a project enable closer collaboration among diverse team members and superior external communication NPD programs in family SMEs that design NPD teams by relying on the existing departments of the firm and contribute to NPD projects by devoting part of the time of their human resources outperform those that design NPD teams by relying on dedicated cross-functional teams |
Diéguez‐Soto et al. (2016) | n = 583 Spanish family firms | Effect of professional management on innovation in family-owned firms | Professionalism provides owner-managers with resources, ideas, labels, and visions with which to build and develop the business over time Professionalism is positively associated with expected innovation in family firms Professionalism is positively associated with persistence of innovation in family firms Family firms with less professional management remain disadvantaged when it comes to new product development |
Hauck and Prügl (2015) | n = 81; Quantitative data collected from the owner-managers of entirely family-owned (100%) and -managed hotels and guesthouses located in a ski resort in Austria; cross-sectional quantitative survey design | How socioemotional factors are related to the owner-manager’s perception of the intra-family leadership succession as an opportunity for innovation activities in family firms | Successors are identifiers of new entrepreneurial opportunities and drivers of innovation Act as source of new information, knowledge and resources |
Hillebrand et al. (2020) | n = 746 | Influence of the generation in control and the (non-family) management diversity on family firm innovation | Family generation and TMT diversity increase product innovation Family firms in third or later generations outperform first-generation ones (i.e. generational development) and family firms with a mixed TMT (i.e. with non-family members in the top management team) outperform purely family-managed family firms TMT diversity increase R&D inputs and exploration, not exploitation |
Kammerlander and Ganter (2015) | n = 7 longitudinal case studies in the German consumer goods industry | How the attention of family CEOs to discontinuous technological shifts, the interpretation and decision‐making processes associated with these changes, and ultimately organizations' responses are affected by CEOs’ noneconomic goals | Family CEO’s noneconomic goals (power and control, transgenerational value, maintenance of family reputation, continuance of personal ties, personal affect) determine whether discontinuous technologies are considered as relevant enough to react CEOs from different FFs might pursue different noneconomic goals, which help to explain the variance in FFs’ adaptations to discontinuous technological change |
Matzler et al. (2015) | CDAX listed firms in Germany n = 134 for the innovation input estimation; n = 136 for the innovation output of PATSTAT database | How family ownership, management, and governance impact innovation input and output | Results capture the extent of family participation on supervisory and management boards Deployment of idiosyncratic resources unique to family firms require a strong involvement of families in management and governance. The more family members are involved in management and governance, the greater the likelihood that they can deploy these family-specific resources Only active involvement of the family creates an intersection between the firm and the family. Only via these system interactions can family-specific resource advantages and capabilities come to light Familial TMTs are therefore more efficient in exploiting their given R&D investments because they are more likely to engage in a process of social capital building that is unique to family firms |
Sanchez-Famoso et al. (2014) | n = 172 | Effects of internal social capital on organisational innovation | Internal networking relationships between family members (family social capital) and between non-family members (non-family social capital) in family firms facilitates innovation The better the family members among each other and also among non-family members (communities of practices), the higher the level of innovation Informality and relationship orientation is a special form of human capital It is sufficient if networking takes place between non-family members, the human capital of employees then substitutes the family Professionalisation and relationship orientation increases innovation |
Serrano-Bedia et al. (2016) | n = 110 | Relationship between sources of knowledge and innovation performance in family firms | Human capital increases innovation Social capital = acquired knowledge increases innovation Cooperation agreements and alliances increase innovation Lack of TMT diversity is a sign of low human capital, which leads to a reduction of innovation |
Social capital | |||
Broekaert et al. (2016) | n = 2604 | Relationship between family ownership and R&D and organizational flexibility | Family firms engage less in R&D, but are more flexible in the way they organize and that this organizational flexibility enables less in R&D, but are more flexible in the way they organize Organizational flexibility enables them to successfully develop new products and even outperform non-family owned businesses when it comes to process innovation |
Classen et al. (2012) | n = 355 | Differences in the diversity of cooperation partners used for innovation-related activieties between family and non-family SMEs | Family SMEs have a lower search breadth than their non-family counterparts Family SMEs use a less diversified set of partners to acquire innovation-related resources than non-ffs External social capital benefits may apply primarily to nonintrusive ties not threatening the family’s SEW and network configurations not exceeding the controlling family’s limited cognitive and absorptive capacity |
Gómez-Mejía et al. (2007) | n = 1237 | SEW and risks in family-controlled firms | Higher social capital has positive impact on a family’s commitment to the firm in terms of the moral obligation to exercise strong influence, recognition of the costs associated with leaving the firm, and emotional bonds Social capital should be stronger in the founding-family-controlled and managed firms (stage one) and that it should be relatively lower as the firm moves into later stages, ownership and management by non-founding extended family (stage two) and ownership by extended family members who are not involved in the firm’s management (stage three) |
Gómez-Mejía et al. (2014) | n = 610 database: Corporate Library, COMPUSTAT, Thompson Financial, and the U.S. Patent and Trademark office | How the R&D decision differs for family firms due to the influence of SEW factors upon the family’s R&D mixed gamble in a hightechnology context | SEW losses mitigated by gains from enhanced social capital due to R&D investment SEW gains from enhanced social capital due to R&D investment |
Kraiczy et al. (2015) | n = 114 family SMEs | How organizational context interacts with CEO risk-taking propensity to affect NPD innovativeness | CEO risk-taking propensity has a positive effect on NPD innovation Effect of CEO risk-taking propensity on NPD innovativeness is stronger in family firms at earlier generational stages |
Pittino et al. (2013) | n = 508 | How family firms manage their access to technology | Family firms, compared with non-family firms, rely more on exploration-oriented alliances Technology sourcing strategy tends to shift towards exploitation goals as organisational knowledge codification and formalisation take place Family firms remain in small familiar networks due to their risk aversion Prefer long-term relationships and invest in depth rather than breadth Make less technology sourcing Use their social capital significantly more for exploitation, while at the same time doing less exploration Family firms are quite good at exploitation and if they do something to overcome their human capital deficit, they do exploration |
Pucci et al. (2021) | n = 145 from one life sciences cluster | Moderating effect of family involvement on firm relationships and innovation performance | Family involvement positively moderates the effect of firm relationships on R&D performance |
Salvato and Melin (2008) | n = 4 cases | Relationship between social capital and value creation in each individual FCB | The greater the closure of ties within the controlling family and trustworthiness among family members, the greater the amount of family-generated human capital available for strategic resource recombination Social capital enhances value creation in any type of firm, in FCBs these advantages are absorbed in family members’ social links and in the family network’s configuration Family business managers should invest in both external and internal social capital Investments in building the external social capital of individuals, units, or the family firm as a whole should be balanced by investments in internal social capital within the firm and, more importantly, within the family |
Sanchez-Famoso et al. (2019) | n = 172 | Effect of family control and generational involvement on innovation | Family and nonfamily SC has positive effect on innovation Fit advances the knowledge on the consequences of an interplay between social groups in an organization, suggesting that the presence of a strong dominant coalition creates the conditions for a positive reciprocal influence between social communities within an organizational setting Complementarity between different forms of internal SC in the creation of innovation External SC may be investigated as a complementary or substitutive resource of the internal network |
Patient financial capital | |||
Anderson et al. (2010) | n = 2000 largest, publicly-traded U.S. firms 2003–2007 | Relation between equity ownership structure and corporate investment policy by focusing on the effect, if any, of family shareholders on firms’ investment decisions | Family firms devote fewer financial resources to R&D investments than nonfamily firms Controlling shareholders commit fewer financial resources to long-term investments than non-family firms |
Block (2012) | n = 154 | Whether family firms exhibit high or low levels of R&D spending and R&D productivity and how they, as a group, compare with lone founder or other firms | Lone founder-owned firms invest more resources in R&D relative to other firms family-owned firms invest less resources in R&D relative to lone founder-owned firms Family-owned firms invest less resources in R&D relative not only to the group of lone founder-owned firms but also to the group of other firms |
Chirico and Nordqvist (2010) | n = 4 multiple case studies, semi-structured interveiws | How transgenerational value creation is generated across generations | Knowledge and organizational culture are enablers or inhibitors of resource-recombination processes through which entrepreneurial performance is faciliated and transgenerational value is created to be partially reinvested in knowledge |
Muñoz-Bullón and Sanchez-Bueno (2011) | n = 736 | Impact of family involvement in owenership and control of firms’ R&D intensity | Family firms record a significantly lower R&D intensity than non-family firms Because of ownership and control in the hands of family members, with ensuing reluctance to recruit nonfamily professional managers Family members’ difficulty in mobilizing the necessary external financial resources for carrying out R&D investments |
Rondi et al. (2019) | Interviews with 2 family business consulting firms | How can family firms unlock their innovation potential? | Long-term orientation of family owners lead to a greater incentive to invest more resources in innovation, yet the findings indicate that due to risk aversion and potentially higher agency costs that lead to inner family conflicts, they invest less in R&D At the individual level, CEO risk-taking propensity—the willingness of a CEO to commit significant resources to exploit opportunities or engage in behaviors with uncertain outcomes |
Financial capital and human capital | |||
Bammens et al. (2015) | n = 893 | Role of eployees’ innovative work involvement as an internal informal source of innovation | Exploitative innovations are more in line with families’ socioemotional concerns, as they involve lower risks and are less dependent on additional financial and human resources from outside the family |
Block et al. (2011) | n = 116 | Influence of owners and owner-managers of public companies on innovation | Close associations between family owners and members turn the former into family nurturers thus dividing loyalties between the family and business Constrains financial and knowledge resources and risk taking, which reduces the scope and quality of innovation |
Block et al. (2013) | n = 248 | Effects on the economic and technological importance of innovations produced in family and founder firms | Patient capital of family owners might promote a tolerance of below average firm returns, and hence an indifference toward an insufficient of ineffective innovation policy Innovation constraints regarding financial and talent resources can be significant in family-managed firms |
Chrisman and Patel (2012) | n = 964 | R&D investments and innovation performance | Human capital investments, which can further increase the risk aversion of family firms owing to managerial capacity constraints that limit their ability to manage the R&D process and increase the hazards associated with making such investments To overcome such constraints, family firms would need to supplement their TMTs with nonfamily managers who possess technical backgrounds and experience |
Classen et al. (2014) | n = 2087 family SMEs | Differences between family and non-family firms in innovation investment, product and process innovation outcomes, and labor productivity | Family SMEs invest less financial capital in investments For the same financial input, family SMEs are better at exploitation than non-family SMEs For a given innovation output (in exploitation and exploration), family SMEs have lower labour productivity, i.e. they are less measurably productivity Gap shows that for the same investment, more output is produced by the additional human capital slack |
Munari et al. (2010) | n = 1000 publicly-traded firms, 163 from France, 239 from Germany, 69 from Italy, 31 from Norway, 62 from Sweden and 436 from the United Kingdom | Effects of ownership and control on R&D investments by considering the influence of different types of ownership and of institutional corporate governance systems | Higher shareholding by families is negatively associated with R&D investment managers can leverage their capabilities and focus on profitable business opportunities even if lacking personal resources or collateral to be used to secure debt financing |
Financial capital and social capital | |||
Munari et al. (2010) | 15,174 observations (1998–2007); n = 6319 percent family firms; n = 8854 percent nonfamily firms | Innovation behavior in family firms | Family firms are less inclined to turn to external sources (contracting mechanisms and collaboration agreements) than are nonfamily firms |
Patel and Chrisman (2014) | n = 847 | Why family firms are able to invest less in R&D and still remain competitive | Why family firms might make different R&D investments than nonfamily firms—to protect socioemotional wealth and the undiversified financial holdings of the family—as well as how those investments differ Family firms make exploitative R&D investments that reduce the variability of sales when performance meets or exceeds aspirations and make exploratory R&D investments that increase variability in sales when performance is below aspirations |
Sciascia et al. (2015) | n = 240 family SMEs | Family ownership and R&D intensity | Family ownership is likely to foster R&D intensity because of the long-term orientation of family owners that increases the family firm’s propensity to be at the risk of investing in R&D activities When overlap between family wealth and firm equity is high, family ownership reduces R&D intensity because family owners derive the majority of both their financial and socioemotional benefits from the firm and could potentially lose everything if engaging and committing excessive resources to risky projects where the outcome is uncertain, such as in R&D projects |
Human capital and social capital | |||
Bendig et al. (2020) | n = 744 firm-year observations for 124 manufacturing firms | Effect of family involvement on technological and market innovations and the moderating role of board members’ social capital | Family involvement is negatively related to the number of inventions Family involvement is positively related to the market relevance of innovations Board members’ human and social capital increases technological innovations |
Brinkerink (2018) | n = 346 | How do family and non family firms learn | Family firms are better at exploitation because they use smaller, tighter and more established networks Family firms are worse at exploration, because they have social capital but do not use it for the usual reasons |
Cassia et al. (2011) | n = 4 multiple case studies | Specificities of small family firms in conducting NPD activities and how the family variable impact on the NPD process | FFs face financial and human resource constraints, but their LTO allows them to dedicate resources to innovation |
Casprini et al. (2017) | Single case study | How family firms execute open innovation strategies by managing internal and external knowledge flows | Active use of social capital (small network with trustworthy partners) increases innovation Problems to use the network on a wide scale Family internally uses the employees who do it for them and this increases innovation Develop stable and long-term relationships with employees and outside partners by devoting continuous attention to capitalizing on existing relationships and building trust in social interactions, both within and beyond the firm While the imprinting capability derives from the non-economic goals that drive and inspire family firm behavior, fraternization results from the distinctive traits of the family’s and the family firm’s social capital |
Kraiczy et al. (2014) | n = 63 family firm TMT | Relationship between TMT innovation orientation and new product portfolio performance | Those TMTs with a high ratio of family members may suffer from lack of knowledge and social capital of family-external TMT members, which may lead to poor decisions in regard to innovations Higher number of family members reduces non-family members' discretion and freedom to act and diminishes the attractiveness of the family firm as a place to work, thus limiting human capital |
Llach and Nordqvist (2010) | n = 151 | Differences in innovative behavior between family and non-family firms | Differences between family and non-family firms with regard to the role of human, social and marketing capital for innovation With regard to human capital, family firms have both a higher percentage of qualified employees and a higher percentage of employees devoted to R&D tasks Family firms focus more on qualified employees who can meet the specific requirements of costumers than spending a high budget in basic research Family firms tend to devote more human capital to innovation Family firms have more linkages to other firms which can support innovation that non-family firms have Family firms, with high technical employees and high level of cooperation, produce new products or launch new services according the request of the costumers |
Weimann et al. (2021) | N = 181 | Influence of the social capital of the dominant family coalition on innovation, strategic, renewal, and corporate venturing | The higher the family’s social capital, the higher the innovativeness of the family firm |
Survivability | |||
Cassia et al. (2012) | n = 10 multiple case studies | Relationship between the presence of the family variable within a business enterprise and the managerial factors affecting success of NPD | Long-term view resulted in less pressure for short term paybacks and more attetion to ensure the longevity of the business Family firms are considered to be less progressive in terms of human resource issues such as employee involvement Family firms tend to pay higher wages than non-family firms and care significantly more about the satisfaction of their eployees Family firms are closed family related systems |
Covin et al. (2016) | n = 1671 | Aims to identify combinations of behavioral proclivities and financial resources that drive radical innovation in FFs and NFFs | Different paths that lead to exploration innovation: Through high human capital (proactiveness and responsiveness) Even better when human capital is combined with social capital (proactiveness and networking) Best when financial, social and human capital come together (financial resources, networking, proactiveness and risk-taking) No path to the problem that increasing the financial resource input does not increase exploratory innovation, i.e. financial capital alone does not have an effect on exploratory innovation Financial capital cannot substitute social capital and/or human capital |
De Massis et al. (2015) | n = 10 multiple case studies | How and why the anatomy of the product innovation process differs between family and nonfamily firms | Family firms' human capital can be a source of competitive advantages and helps developing social capital between the family and stakeholders Management of financial resources in FFs is unique due to the long-term interaction between the family and the business |
Diaz-Moriana et al. (2020) | 42 interviews | Why multigenerational firms innovate | LTO positively influences NPD 3 innovation patterns on why and how multigenreational family firms innovate: conserving, persisting, legacy-building based on LTO |