Prior findings are inconclusive concerning the innovation activities of family SMEs when compared to non-family counterparts. This study overcomes these shortcomings by analyzing specific determinants influencing the innovation output of family SMEs. Using data of 1.870 SMEs located in Germany, we argue that the main characteristic of family SMEs is the unity of ownership and leadership when compared their non-family counterparts. Deriving a set of hypotheses from this assumption, we find that local embeddedness, long-term orientation and effective corporate governance structures positively affect the ability to generate product and process innovations family firms. We can show, for example, that older family firms conduct more research and development activities with partners due to emergent regional networks. We also find that the innovation output continuously falls from generation to generation.
Werner, A.; Schröder, C.; Mohr, B. (2013): Innovationstätigkeit von Familienunternehmen, in: Institut für Mittelstandsforschung Bonn (Hrsg.): IfM-Materialien Nr. 225, Bonn.