The relationship between innovation, knowledge, and performance in family and non-family firms: an analysis of SMEs

Abstract

This study seeks to examine the relationship between innovation and knowledge in family versus non-family businesses with regard to performance. Data from 430 small and medium-sized enterprises were analyzed through hierarchical regression analysis, and innovation was found to be a significant factor in both family and non-family samples. However, knowledge in family firms was also found to be significant with innovation. Implications for theory and practice are discussed that may provide possible competitive advantage for small family firms.

Disentangling antecedents and performance effects of family SME innovation: A knowledge-based perspective

“…Building on this finding, this study examines the effect of family members' KI on TI and MI and ultimately on the financial performance of the family. Considering that the intangible KI factor has been shown to influence the innovation of firms (Price et al 2013;Zahra et al 2007;Mol and Birkinshaw 2009) and that KI among family members forms a particular relevant internal knowledge source in family firms (Chirico and Salvato 2016), a more thorough analysis of the relationship between knowledge and innovation in family firms is worth investigating. In agreement with these findings, this study proposes that a family's collective internal knowledge (Habbershon and Williams 1999) is a key resource for TI and MI.…”

“…With today's rapidly changing business environments and the dissemination of IT and other technologies, knowledge can be seen as one of the most important resources for sustaining a firm's long-term competitive advantage, in addition to tangible resources or industry conditions. Therefore, knowledge is defined as the continuous process of managing all knowledge to anticipate current and future needs, to identify and exploit existing and acquired knowledge, and to develop new opportunities (Price et al 2013). Knowledge enables the transformation and manipulation of diverse resources into novel products, processes and business practices (Alavi and Leidner 2001;Price et al 2013).…”

“…Therefore, knowledge is defined as the continuous process of managing all knowledge to anticipate current and future needs, to identify and exploit existing and acquired knowledge, and to develop new opportunities (Price et al 2013). Knowledge enables the transformation and manipulation of diverse resources into novel products, processes and business practices (Alavi and Leidner 2001;Price et al 2013).…”

Empirical research on Innovation in Family Business: literature review and proposal of an integrative framework

“…In this regard, Classen et al (2014) provided an exploratory analysis of differences between family and nonfamily firms in innovation investment, product and process innovation outcomes, and labor productivity. Price, Stoica, and Boncella (2013) examined the relationship between innovation and knowledge in family versus non-family businesses with regard to performance. Furthermore, Chrisman, Chua, De Massis, Frattini, and Wright (2014a) presented a framework of how family involvement influences innovation management based on ability (discretion to act) and willingness (disposition to act), two drivers that distinguish family firms from non-family firms and lead to heterogeneity among family firms.…”

Accelerating Innovation in Small and Medium-Sized Enterprises in the ICT Services Sector

“…Price et al (2013) noted that "firms that engage in developing innovative products and services are positioned to compete more successfully through the development of new products and processes, before competitors in first-mover advantage, increasing market share, return on investment (ROI), and overall firm success" (p. 1). Finally, Coad and Rao (2008) also studied the effects of innovation on firm growth in high-tech sectors (including computers and office equipment, electronics, medical instruments, and drugs); their results vary within the different sectors analyzed, but they generally find that growth is related to innovativeness for most firms.…”