Innovation at the Heart: Unveiling the Strategic Mastery of Family Firms in Resource Management

Abstract

In the current business landscape, innovation is essential for companies to ensure their survival and competitiveness. However, innovation often requires substantial investments that may exceed a company's internal resources, leading businesses to seek alternative mechanisms such as technological collaboration with external entities and R&D investment. Research has shown that both strategies positively influence firms' innovation performance. However, the factors affecting organizational behaviour and outcomes are often overlooked. Family businesses, characterized by their unique ownership structure and intertwined financial and non-financial goals, are ideal for studying how these objectives impact innovation decisions. This study aims to determine whether technological collaboration and internal R&D expenditure have a greater effect on the innovation processes of family firms compared to non-family firms. Using data from 2,415 Spanish companies over ten years, this research contributes to the literature by integrating the socioemotional wealth perspective and demonstrating that family firms are better equipped to implement and benefit from these strategies to enhance innovation outcomes.