Openness to knowledge: does corporate social responsibility mediate the relationship between familiness and absorptive capacity?

Abstract

Being open to absorb external knowledge is a key competitive advantage for small- and medium-sized family firms. In this study, we propose and test a model in which corporate social responsibility is the key feature linking family-specific resources (i.e., familiness) to the family firm’s ability to absorb external knowledge. By integrating different theoretical perspectives, we argue that family firms use corporate social responsibility activities as signals to build trust and long-term relationships with internal and external stakeholders, incentivizing these groups to share their knowledge with the family firm. The empirical analysis is based on data from 327 German small- and medium-sized family firms. The results of the analyses support our main hypotheses that the relationship between familiness and absorptive capacity is positively mediated by employee- and customer-oriented corporate social responsibility activities. Although hypothesized, we find no mediation effect of community-oriented corporate social responsibility activities. In sum, the study contributes to the understanding of how and why family firms employ their family-specific resources to establish corporate social responsibility activities, which, in turn, are used as a strategic instrument to strengthen their dynamic capabilities.