The speed of internationalization in regionally clustered family firms: a deeper understanding of innovation activities and cluster affiliation

Abstract

This article aims to explore how innovation activities and cluster affiliation moderate the relationship between family involvement and post-internationalization speed in family firms. Based on a sample of 639 Portuguese family businesses (FBs) created and internationalized between 2010 and 2018, we show that, all things being equal, higher levels of family involvement in ownership and management lead to a lower post-internationalization speed. When considering the effect of cluster affiliation, we found that clustered FBs have a lower propensity to slow down the post-internationalization process than their non-clustered counterparts. Likewise, when we account for the interactive effect of innovation activities, the results confirm that innovative FBs are less likely to slow down the post-internationalization process compared to non-innovative FBs. In addition, the concern of family firms in developing innovation was particularly pronounced when they belong to clusters. This finding is explained by the existence of socially proximate relationships with other cluster members, based on similarity, trust, knowledge exchange, and sense of belonging, which push family firms to innovate to counteract the detrimental effects of a higher family involvement in the post-internationalization speed. Our study, therefore, stresses the importance of clusters and innovation activities in moderating the relationship between family involvement and post-internationalization speed.