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Family ownership: does it matter for funding and success of corporate innovations?

Author

Listed:
  • Schäfer, Dorothea
  • Stephan, Andreas
  • Mosquera, Jenniffer Solórzano

Abstract

Using the Mannheim innovation panel, we investigate whether family firms have higher financial need and how this affects both innovation input and innovation outcomes such as firm or market novelties, or process innovation. Applying the CDM framework, we find that family firms are more likely to have a latent financial need for innovation, which means that they have innovation ideas which they have not implemented yet. We find that family firms have a significantly lower marginal innovation productivity in particular for innovations with radical character, i.e., market novelties. We conclude from this evidence that family firms have a comparative disadvantage in innovation projects that imply high risk and require high innovation capability.

Suggested Citation

  • Schäfer, Dorothea & Stephan, Andreas & Mosquera, Jenniffer Solórzano, 2017. "Family ownership: does it matter for funding and success of corporate innovations?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 48(4), pages 931-951.
    • Handle: RePEc:zbw:espost:249770
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    Cited by:

    1. Febi Jensen & Dorothea Schäfer & Andreas Stephan, 2019. "Financial Constraints of Firms with Environmental Innovation," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 88(3), pages 43-65.
    2. Dorothea Schäfer & Andreas Stephan & Sören Fuhrmeister, 2024. "The impact of public procurement on financial barriers to general and green innovation," Small Business Economics, Springer, vol. 62(3), pages 939-959, March.
    3. Marco Cucculelli & Valentina Peruzzi & Alberto Zazzaro, 2019. "Relational capital in lending relationships: evidence from European family firms," Small Business Economics, Springer, vol. 52(1), pages 277-301, January.
    4. Dorothea Schäfer & Andreas Stephan & Sören Fuhrmeister, 2022. "The Impact of Public Procurement on Financial Barriers to Green Innovation: Evidence from European Community Innovation Survey," Discussion Papers of DIW Berlin 2014, DIW Berlin, German Institute for Economic Research.
    5. Moritz Belling & Ulrich Pidun & Dodo zu Knyphausen-Aufseß, 2021. "Unbundling Strategic Change in Family Firms: the Influence of Familiness on the Strategic Change Process," Schmalenbach Journal of Business Research, Springer, vol. 73(3), pages 381-411, December.
    6. José António Ferreira Porfírio & Pedro Santos & Ricardo M. Rodrigues, 2024. "Digital Transformation in Family Businesses: An Analysis of Drivers with fsQCA," Sustainability, MDPI, vol. 16(23), pages 1-18, November.
    7. Nils Grashof, 2025. "Familiar but also radical? The moderating role of regional clusters for family firms in the emergence of radical innovation," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 45(1), pages 17-49, March.
    8. Li, Qing & Hu, Dezhuang & Li, Tang, 2022. "The innovation of family firms in China: New evidence from the China employer-employee survey," China Economic Review, Elsevier, vol. 72(C).
    9. Dorothea Schäfer & Willi Semmler, 2024. "Is interest rate hiking a recipe for missing several goals of monetary policy—beating inflation, preserving financial stability, and keeping up output growth?," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 14(2), pages 235-254, June.
    10. Martin Falk & Eva Hagsten, 2021. "Innovation intensity and skills in firms across five European countries," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(3), pages 371-394, September.
    11. Vekemans, Lien & Michiels, Anneleen & Steijvers, Tensie & Molly, Vincent, 2025. "What drives bank financing in family firms? A systematic review and research agenda," Journal of Family Business Strategy, Elsevier, vol. 16(2).

    More about this item

    Keywords

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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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