Academic journal article Innovation: Organization & Management

Analysis of the Relationship between Sources of Knowledge and Innovation Performance in Family Firms

Academic journal article Innovation: Organization & Management

Analysis of the Relationship between Sources of Knowledge and Innovation Performance in Family Firms

Article excerpt

Introduction

In today's environment of globalization and rapid technological change, innovation is a crucial factor in the growth and long-term survival of firms. The need to be innovative applies to firms of every size, sector and ownership type. However, firms do not have the same innovative behaviour or face the same challenges and problems. Within this general context, research on innovation management in family firms (Chrisman & Patel, 2012; De Massis, Frattini, & Lichtenthaler, 2013; De Massis, Frattini, Pizzurno & Cassia, 2015; Kellermanns, Eddleston, Sarathy & Murphy, 2012; Patel & Chrisman, 2014) shows these firms exhibit different innovation behaviours based on their risk preferences, resource endowments and family objectives (Chrisman, Chua, Pearson, & Barnett, 2012). This result justifies the increasing research interest in family firm innovation in recent years.

While this topic is in an early stage of investigation, a recent review of the literature on technological innovation in family firms (De Massis et al., 2013) revealed that studies usually focus on the direct impact of family involvement on the level of both R&D expenditures and the innovation outcomes of family firms. To date, little research has been dedicated to other aspects of family involvement, such as its effects on innovation activities or its moderating effects on the relationship between technological innovation activities and outputs (De Massis et al., 2013). A gap in the research on the impact of different knowledge sources on innovation performance is evident: despite the existence of ample literature on this issue (i.e. Cassiman & Veugelers, 2006), Schmiedeberg, 2008; Tsai & Wang, 2009), to the best of our knowledge, only one paper has researched this topic for the particular case of family firms (Nieto, Santamaría, & Fernández (2015).

Given these considerations, the current study has two aims. First, we aim to analyse the impact of the use of different knowledge sources on innovation performance in both manufacturing and service family firms in an effort to expand the limited existing knowledge about this subject. Second, we aim to study the moderating effect of specific family firm characteristics on the relationship between sources of knowledge and innovation performance. This research question, which has not been addressed in previous works, constitutes the most novel contribution of this paper. To reach these objectives, we collected data from a survey of Spanish family firms that we created using items from Community Innovation Surveys.

The remainder of the paper is organized as follows: Section 2 establishes the hypotheses associating the use of different knowledge sources with innovation performance and presents a theoretical foundation for examining the degree to which these relationships are moderated by specific family firm characteristics. The subsequent section presents the methods used in the empirical study. Section 4 presents the empirical findings and discussion. Finally, we present the conclusions, implications and limitations of the research.

Review of the literature, and hypotheses

Sources of knowledge and innovation performance

This literature review focuses on how innovative performance is impacted by a company's decision regarding the source or sources of knowledge used in innovationoriented activities. We focus on the transaction cost and firm knowledge base perspectives. Transaction cost theory (TCT) (Coase, 1937; Williamson, 1985) suggests that the organization of R&D activities is driven by the minimization of both production and transaction costs. The knowledge base of the firm perspective states that in rapidly changing environments with increasing costs, shorter product life cycles and greater technological complexities (Berchicci, 2013), achieving a sustainable competitive advantage requires exploring and integrating different specific knowledge areas through internal innovation activities and external technology outsourcing (Kogut & Zander, 1992; Teece, Pisano, & Shuen, 1997). …

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