Doing more with less: Innovation input and output in family firms

Item Type Journal paper
Abstract

Family firms are often portrayed as an important yet conservative form of organization that is reluctant to invest in innovation; however, at the same time, evidence shows that family firms are still flourishing and that many of the world's most innovative firms are indeed family firms. Our study contributes to disentangling this puzzling effect. We argue that family firms-owing to the family's high level of control over the firm, wealth concentration, and importance of non-financial goals-invest less in innovation but have an increased conversion rate of innovation input into output and, ultimately, a higher innovation output than non-family firms. Empirical evidence from a meta-analysis based on 108 primary studies from 42 countries supports our hypotheses. We further argue and empirically show that the observed effects are even stronger when the CEO of the family firm is a later-generation family member. However, when the CEO of the family firm is the firm's founder, innovation input is higher and, contrary to our initial expectations, innovation output is lower than that in other firms. We further show that the family firm-innovation input/output relationships depend on country-level factors, namely, the level of minority shareholder protection and the education level of the workforce in the country.

Authors Duran, Patricio; Kammerlander, Nadine; van Essen, Marc & Zellweger, Thomas
Journal or Publication Title Academy of Management Journal
Language English
Keywords Family firm, R&D, innovation input, innovation output, leadership, institutions, meta-analysis.
Subjects business studies
HSG Classification contribution to scientific community
Refereed Yes
Date August 2016
Publisher Academy of Management
Place of Publication Briarcliff Manor, NY
Volume 59
Number 4
Page Range 1224-1264
ISSN 0001-4273
ISSN-Digital 1948-0989
Publisher DOI 10.5465/amj.2014.0424
Depositing User Prof. Dr. Marc van Essen
Date Deposited 12 Oct 2015 13:24
Last Modified 10 Nov 2016 16:05
URI: https://www.alexandria.unisg.ch/publications/244500

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Citation

Duran, Patricio; Kammerlander, Nadine; van Essen, Marc & Zellweger, Thomas (2016) Doing more with less: Innovation input and output in family firms. Academy of Management Journal, 59 (4). 1224-1264. ISSN 0001-4273

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https://www.alexandria.unisg.ch/id/eprint/244500
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