Research and innovation and the role of competition in family owned and managed firms

Yuping Yin*, Frank Crowley, Justin Doran, Jun Du, Mari O'Connor

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

Purpose: This paper examines the innovation behavior of family-owned firms versus non-family-owned firms. The role of internal family governance and the influence of external stimuli (competition) on innovation are also considered. Design/methodology/approach: The data of 20,995 family and non-family firms across 38 countries are derived from the World Bank Enterprise Survey during the period 2019–2020. Probit models are used to examine the impact of family ownership, family governance, and competition on innovation outcomes. Findings: Family firms are more likely to make R&D investments, acquire external knowledge, engage in product innovation (including innovations that are new to the market) and process innovation, relative to non-family firms. However, a high propensity of family member involvement in top management positions can reduce innovation. Competition has a negative impact on innovation outcomes for both family and non-family firms, but it has a positive moderating effect on the innovation activities of family firms where a higher level of family member involvement in management is present. Originality/value: This paper provides novel insights into family firm innovation dynamics by identifying family firms as more innovative than non-family firms for all types of indicators, debunking the idea that family firms are conservative, reluctant to change, and averse to the risks in innovation activities. However, too much family involvement in decision making may stifle some innovation activities in family firms, except in cases where the operating environment is highly competitive; this provides new insights into the ownership-management dynamic of family firms.

Original languageEnglish
JournalInternational Journal of Entrepreneurial Behaviour and Research
Early online date26 Jul 2022
DOIs
Publication statusE-pub ahead of print - 26 Jul 2022

Bibliographical note

© Yuping Yin, Frank Crowley, Justin Doran, Jun Du and Mari O’Connor. Published by Emerald
Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0)
licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both
commercial and non-commercial purposes), subject to full attribution to the original publication and
authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/
legalcode

Keywords

  • Competition
  • Family firms
  • Family management
  • Innovation

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