Does too much love hinder innovation? family involvement and firms' innovativeness in family-owned small medium enterprises (smes)

Abstract

Current literature suggests that family involvement has an impact on firms' innovation propensity, but it does not yet seem able to explain in which conditions. Adopting a curvilinear model, (Olson's circumplex model of family) this research demonstrates that the family's cohesion and flexibility levels play a significant role in the relationship between family involvement and firm innovation propensity. Moreover, by investigating a sample of SMEs (N=125) quantitatively, this paper also highlights that a curvilinear model shows a better fit (in comparison to linear models) for explaining the family involvement impact on innovation propensity. Finally, implications for both scholars and practitioners are discussed.