Small Business Economics

, Volume 42, Issue 3, pp 595–609 | Cite as

Innovation in family and non-family SMEs: an exploratory analysis

  • Nicolas Classen
  • Martin Carree
  • Anita Van Gils
  • Bettina Peters
Article

Abstract

This study provides an exploratory analysis of differences between family and non-family firms in innovation investment, product and process innovation outcomes, and labor productivity. Using data from the Community Innovation Survey on 2,087 German small- and medium-sized enterprises (SMEs), we observe significant disparities at each stage of the innovation process. Whereas family SMEs have a higher propensity to invest in innovation at all, conditional on investing in innovation, these companies do so less intensively than their non-family counterparts. Family SMEs further tend to outperform non-family SMEs in terms of process innovation outcomes when controlling for innovation investment. Given the level of product and process innovation, however, family SMEs underperform regarding labor productivity in comparison to non-family SMEs. These findings complement previous empirical research by illustrating how the presence of a dominant family relates to innovation inputs and outputs of SMEs in Europe’s largest economy and its innovative SME sector.

Keywords

Family firms Innovation investment Product innovation Process innovation Productivity 

JEL Classifications

O32 L26 C31 

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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  • Nicolas Classen
    • 1
  • Martin Carree
    • 1
  • Anita Van Gils
    • 1
  • Bettina Peters
    • 2
  1. 1.School of Business and EconomicsMaastricht UniversityMaastrichtThe Netherlands
  2. 2.Centre for European Economic Research (ZEW)MannheimGermany

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