Understanding the Innovation Behavior of Family Firms

Authors

  • Maria Jesus Nieto,

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    • Adress correspodence to: Maria Jesus Nieto, Organizacion de empresas, Universidad Carlos III de Madrid, c/Madrid, 126, Getafe, Madrid 28903. E-mail: mnieto@emp.uc3m.es.

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    • Maria Jesus Nieto is an Associate Professor at the Business Management Division, University Carlos III of Madrid, Spain.
  • Lluis Santamaria,

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    • Lluis Santamaria is an Associate Professor at the Department of Business Administration, University Carlos III of Madrid, Spain.
  • Zulima Fernandez

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    • Zulima Fernandez is a Professor at the Business Management Division, University Carlos III of Madrid, Spain.

  • The authors thank the Editor and the two anonymous reviewers for their helpful comments and suggestions. This study has been financially supported by projects ECO2012-36160; ECO2010-22105-C03-03 and CCG10-UC3M/HUM-4760. The usual disclaimer applies.

Abstract

This paper examines innovation behavior in family firms, analyzing their innovation efforts, sources, and results. Its underlying premise is that innovation behavior depends on the firm's resource endowment and the level of risk inherent in the decision to innovate, factors that make family involvement an influential characteristic in innovation processes. Using a large sample of Spanish firms, the findings show that family firms perform fewer innovation efforts and are less inclined to turn to external sources of innovation—such as technological collaboration—than nonfamily firms. Finally, family firms are more likely to achieve incremental innovations than radical innovations.

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