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Risk aversion, innovation and performance in family firms

Author

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  • Angel L. Meroño-Cerdán
  • Carolina López-Nicolás
  • Francisco J. Molina-Castillo

Abstract

An analysis of the effect of family governance on the relationships among risk aversion, innovation and performance is the purpose of this study. Beyond the level of risk and innovation, we are interested in analysing the relationship between them and their influence on performance in family firms. Traditionally, risk-seeking has been associated with innovation and performance. Our results confirm both components to be independent and, furthermore, show relationships with opposite signs as expected in the literature. In a sample of 500 firms, the results confirm an idiosyncratic behaviour in family firms; innovation contributes to performance to a higher extent in family firms, and at the same time, risk aversion is positively associated with performance only in non-family firms.

Suggested Citation

  • Angel L. Meroño-Cerdán & Carolina López-Nicolás & Francisco J. Molina-Castillo, 2018. "Risk aversion, innovation and performance in family firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 27(2), pages 189-203, February.
    • Handle: RePEc:taf:ecinnt:v:27:y:2018:i:2:p:189-203
    DOI: 10.1080/10438599.2017.1325569
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    Cited by:

    1. Francisca García-Lopera & José Manuel Santos-Jaén & Mercedes Palacios-Manzano & Daniel Ruiz-Palomo, 2022. "Exploring the effect of professionalization, risk-taking and technological innovation on business performance," PLOS ONE, Public Library of Science, vol. 17(2), pages 1-19, February.
    2. Carolina López-Nicolás & Jesús Ruiz-Nicolás & Enrique Mateo-Ortuño, 2021. "Towards Sustainable Innovative Business Models," Sustainability, MDPI, vol. 13(11), pages 1-19, May.
    3. Yingying Sun & Kexin Bi & Shi Yin, 2020. "Measuring and Integrating Risk Management into Green Innovation Practices for Green Manufacturing under the Global Value Chain," Sustainability, MDPI, vol. 12(2), pages 1-33, January.
    4. Rizwan Ullah Khan & Yashar Salamzadeh & Syed Zulfiqar Ali Shah & Mazhar Hussain, 2021. "Factors affecting women entrepreneurs’ success: a study of small- and medium-sized enterprises in emerging market of Pakistan," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-21, December.
    5. Heider, Anne & Gerken, Maike & van Dinther, Nicolas & Hülsbeck, Marcel, 2021. "Business model innovation through dynamic capabilities in small and medium enterprises – Evidence from the German Mittelstand," Journal of Business Research, Elsevier, vol. 130(C), pages 635-645.
    6. Hua Zhang & Shaofeng Yuan, 2023. "How and When Does Big Data Analytics Capability Boost Innovation Performance?," Sustainability, MDPI, vol. 15(5), pages 1-19, February.
    7. Tomasz Ingram & Katarzyna Bratnicka-Myśliwiec & Teresa Kraśnicka & Izabella Steinerowska-Streb, 2022. "Entrepreneurial Orientation as a Determinant of Sustainable Performance in Polish Family and Non-Family Organizations," Sustainability, MDPI, vol. 14(24), pages 1-25, December.
    8. Orlando Llanos-Contreras & Jose Arias & Carlos Maquieira, 2021. "Risk taking behavior in Chilean listed family firms: a socioemotional wealth approach," International Entrepreneurship and Management Journal, Springer, vol. 17(1), pages 165-184, March.
    9. Changiz Valmohammadi & Javad Sofiyabadi & Bahare Kolahi, 2019. "How do Knowledge Management Practices Affect Sustainable Balanced Performance? Mediating Role of Innovation Practices," Sustainability, MDPI, vol. 11(18), pages 1-23, September.
    10. Yingying Sun & Lei Wu & Shi Yin, 2020. "Green Innovation Risk Identification of the Manufacturing Industry under Global Value Chain Based on Grounded Theory," Sustainability, MDPI, vol. 12(24), pages 1-26, December.
    11. Gian Seloni & Sri Kusrohmaniah & Galang Lufityanto, 2023. "The perils of acting rashly: Risk-taking propensity impeding emotion-based learning in entrepreneurs [Les dangers de l’audace: La propension à prendre des risques entrave l’apprentissage basé sur l," Journal of International Entrepreneurship, Springer, vol. 21(1), pages 89-110, March.
    12. Francesco Aiello & Lidia Mannarino & Valeria Pupo, 2023. "Family Firm Heterogeneity And Patenting. Revising The Role Of Size And Age," Working Papers 202301, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.

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