Reaping what you sow: The family firm innovation trajectory

Abstract

This study sheds more light on the ‘ability-willingness paradox’, which argues that family firms may be more able but less willing to engage in innovation. Using a longitudinal case study, we investigate the influence of family governance attributes during different stages of innovation and suggest that family entrepreneurship facilitates the conversion of innovation inputs to outputs. Family governance attributes (control, monitoring and networking) support innovation activity during some phases, but impede it during others. We also found the reverse: accumulated innovation capabilities influence family firm governance practices such as monitoring behaviour and control, especially when later-generation family members join the firm. These outcomes partially resolve the conflicting outcomes of prior studies and lead to useful propositions that can redirect future research.