How family firms can avoid the trap of strong social ties and still achieve innovation: critical roles of market orientation and transgenerational intent

Abstract

PurposeTo extend family business research, this article proposes and tests a curvilinear relationship between social ties and family firm innovation, with the firm's market orientation and transgenerational intent as moderators.Design/methodology/approachRepresentatives from a sample of 150 family firms in the United Arab Emirates completed self-administered questionnaires. Regression analyses on the collected data test the conceptual model and proposed hypotheses.FindingsThe empirical study reveals an inverted U-shaped relationship, such that a high market orientation mitigates the diminishing returns of social ties on enhancing family firm innovation. Similarly, at high levels of transgenerational intent, family firm innovation increases due to social ties, instead of exhibiting diminishing returns.Originality/valueThese results help explain contradictory outcomes previously attributed to social ties and offer clear guidelines for how family firms can leverage these ties more effectively to enhance their own innovation.