Innovation in family and non-family SMEs: an exploratory analysis
- 2.5k Downloads
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.
KeywordsFamily firms Innovation investment Product innovation Process innovation Productivity
JEL ClassificationsO32 L26 C31
- Barbera, F., & Moores, K. (2013). Firm ownership and productivity: A study of family and non-family SMEs. Small Business Economics, 40(4), 953–976.Google Scholar
- Block, J., Miller, D., Jaskiewicz, P., & Spiegel, F. (2013). Economic and technological importance of innovations in large family and founder firms: An analysis of patent data. Family Business Review, 26(2), 180–199.Google Scholar
- Cameron, A. C., & Trivedi, P. K. (2010). Microeconometrics using stata (2nd ed.). College Station: Stata Press.Google Scholar
- Carroll, G. R., & Hannan, M. T. (2000). The demography of corporations and industries. Princeton, NJ: Princeton University Press.Google Scholar
- Chin, C. L., Chen, Y. J., Kleinman, G., & Lee, P. (2009). Corporate ownership structure and innovation: Evidence from Taiwan’s electronics industry. Journal of Accounting Auditing Finance, 24(1), 145–175.Google Scholar
- Chua, J. H., Chrisman, J. J., & Sharma, P. (1999). Defining the family business by behavior. Entrepreneurship Theory and Practice, 23(4), 19–39.Google Scholar
- De Massis, A., Frattini, F., Pizzurno, E., & Cassia, L. (2013b). Product innovation in family vs. non-family firms: An exploratory analysis. Journal of Small Business Management, 51(4).Google Scholar
- Eddleston, K. A., Kellermanns, F. W., & Sarathy, R. (2008). Resource configuration in family firms: Linking resources, strategic planning and technological opportunities to performance. Journal of Management Studies, 45(1), 26–50.Google Scholar
- European Commission. (2012). SBA Fact Sheet 2012: Germany. Retrieved December 2, 2012, from The World Wide Web: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/files/countries-sheets/2012/germany_en.pdf.
- Gómez-Mejía, L. R., Hynes, K. T., Núñez-Nickel, M., Jacobson, K. J. L., & Moyano-Fuentes, H. (2007). Socioemotional wealth and business risk in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52(1), 106–137.Google Scholar
- Gudmundson, D., Tower, C. B., & Hartman, E. A. (2003). Innovation in small businesses: Culture and ownership structure do matter. Journal of Developmental Entrepreneurship, 8(1), 1–18.Google Scholar
- König, A., Kammerlander, N., & Enders, A. (forthcoming). The family innovator’s dilemma: How family influence affects the adoption of discontinuous technologies by incumbent firms. Academy of Management Review. doi:10.5465/amr.2011.0162.
- Mairesse, J., & Mohnen, P. (2010). Using innovation surveys for econometric analysis. In B. H. Hall & N. Rosenberg (Eds.), Handbook of the economics of innovation (pp. 1130–1155). Amsterdam: Elsevier.Google Scholar
- Monopolkommission. (2008). Weniger Staat, mehr Wettbewerb: Gesundheitsmärkte und staatliche Beihilfen. Hauptgutachten XVII (2006/2007), Nomos, Baden–Baden.Google Scholar
- OECD, & Eurostat. (2005). Oslo manual: Guidelines for collecting and interpreting innovation data (3rd ed.). Paris: Organisation for Economic Co-operation and Development, Statistical Office of the European Communities.Google Scholar
- Patel, P. C., & Chrisman, J. J. (forthcoming). Risk abatement as a strategy for R&D investments in family firms. Strategic Management Journal. doi:10.1002/smj.2119.
- Peters, B. (2008). Innovation and firm performance: An empirical investigation for German firms. ZEW Economic Studies, 38, Physica Heidelberg, New York.Google Scholar
- Stiftung Familienunternehmen. (2011). Die volkswirtschaftliche Bedeutung von Familienunternehmen, Munich. Retrieved January 7, 2013, from The World Wide Web: http://www.familienunternehmen.de/media/public/pdf/studien/Die_volkswirtschaftliche_Bedeutung_der_Familienunternehmen.pdf.
- Terziovski, M. (2010). Innovation practice and its performance implications in small and medium enterprises (SMES) in the manufacturing sector: A resource-based view. Strategic Management Journal, 31(8), 892–902.Google Scholar
- World Economic Forum. (2010). The global competitiveness report 2010–2011. Retrieved April 21, 2013, from The World Wide Web: http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2010-11.pdf.