Eco-innovations in family SMEs: Understanding the role of financial performance satisfaction

Abstract

What drives eco-innovations among family SMEs? Given the mixed findings about family firms’ engagement in environmental practices, this question has profound implications for academia and practitioners. By applying the mixed gamble lens, we propose an inverted U-shape relationship between financial performance satisfaction and the extent to which family SMEs introduce eco-innovations. An analysis using data from Dutch family SMEs supports our hypothesis. Our results provide not only managerial implications for family business practitioners to enhance eco-innovations, but also challenge prior findings in sustainability and family business research regarding the linear relationship between financial performance satisfaction and strategic decisions, opening avenues for future research to dive deeper into the complex impact of financial performance satisfaction on organizational outcomes.