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Determinants of the Economic Performance of Portuguese Family Firms: Is Innovation Relevant?

In: Entrepreneurship and Family Business Vitality

Author

Listed:
  • Aurora A. C. Teixeira

    (University of Porto)

  • Sofia F. Correia

    (University of Porto)

Abstract

Family firms contribute substantially to the economy of a country. Thus, it is surprising that few studies have considered these firms as an object of analysis, especially regarding the importance of innovation to their economic performance. In an attempt to fill this gap, this paper assesses the importance of innovation and technological capabilities in the performance of family firms in Portugal. Based on a sample comprising 230 firms, 110 of which are family-owned, and on econometric estimation methods, we show that internal factors are more relevant in explaining family firms’ economic performance than contextual factors. Family firms run by CEOs with a degree in engineering or with CEOs and management teams with more international experience tend, on average, to present higher levels of productivity. Additionally, the firms that are more experienced in business and more internationalized are also more productive generally. Notwithstanding family firms being less intensive in R&D than nonfamily ones, innovation is one of the most critical determinants for the performance of the former. Besides the relevance of technological- and innovation-related skills mirrored by investment in R&D, the result of innovation, reflected in the successful introduction of innovations (in marketing and combined), emerges as highly relevant statistically, playing a decisive role in the economic performance of family firms. Family firms that are located in economically less developed regions tend, on average, to present higher productivity levels. This seems to indicate that family firms may constitute a driver of regional convergence regarding dynamics and development.

Suggested Citation

  • Aurora A. C. Teixeira & Sofia F. Correia, 2020. "Determinants of the Economic Performance of Portuguese Family Firms: Is Innovation Relevant?," Studies on Entrepreneurship, Structural Change and Industrial Dynamics, in: José Manuel Saiz-Álvarez & João Leitão & Jesús Manuel Palma-Ruiz (ed.), Entrepreneurship and Family Business Vitality, pages 297-326, Springer.
    • Handle: RePEc:spr:seschp:978-3-030-15526-1_15
    DOI: 10.1007/978-3-030-15526-1_15
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    Citations

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    Cited by:

    1. María Jesús Rodríguez-Gulías & David Rodeiro-Pazos & Sara Fernández-López & Manuel Ángel Nogueira-Moreiras, 2021. "The effect of regional resources on innovation: a firm-centered approach," The Journal of Technology Transfer, Springer, vol. 46(3), pages 760-791, June.
    2. Simplice A. Asongu & Raufhon Salahodjaev, 2023. "Demand-Side Mobile Money Drivers of Financial Inclusion: Minimum Economic Growth Thresholds for Mobile Money Innovations," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(4), pages 4848-4865, December.
    3. Simplice A. Asongu & Nicholas M. Odhiambo, 2022. "The of role economic growth in modulating mobile connectivity dynamics for financial inclusion in developing countries," Working Papers 22/013, European Xtramile Centre of African Studies (EXCAS).
    4. Vitor Miguel Ribeiro & Lei Bao, 2021. "Impact of next‐generation access networks on the innovation efficiency of Portuguese municipalities: A spatial econometrics approach," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(5), pages 1615-1637, October.

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