Abstract
Family firms have previously been found to be more efficient in creating innovation internally as compared to non-family firms because of their effective use of resources. Nevertheless, we do not sufficiently understand whether and how family firms signal their innovativeness towards the market to, e.g., enhance their reputation. We discuss this relationship in the context of M&A deal announcements of publicly listed firms. We hypothesize that true family firms mention more innovation in their deal announcements as compared to non-family firms while lone founder firms do so less. Moreover, we argue that being led by a family CEO strengthens this effect. We test our hypotheses based on a sample of 2153 M&A deal announcements and find support for most of our hypotheses.
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