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Innovation Capabilities and Financing Constraints of Family Firms

Author

Listed:
  • Schäfer, Dorothea

    () (DIW Berlin and CeFEO at Jönköping International Business School)

  • Stephan, Andreas

    () (Jönköping International Business School and CESIS at KTH Stockholm)

  • Mosquera, Jenniffer Solórzano

    () (Jönköping International Business School)

Abstract

Using the 2007 Mannheim innovation survey, we investigate whether family firms are more financially constrained than other firms and how this affects both innovation input as well as innovation outcomes such as market and firm novelties or process innovations. Based on the CDM framework, estimation of the recursive system of equations shows that family businesses are more likely to be constrained and have, on average, lower innovation input. Surprisingly, however, this does not reduce their innovation outcomes as, on average, family firms have the same level of innovation outcomes as nonfamily firms.

Suggested Citation

  • Schäfer, Dorothea & Stephan, Andreas & Mosquera, Jenniffer Solórzano, 2015. "Innovation Capabilities and Financing Constraints of Family Firms," Working Paper Series in Economics and Institutions of Innovation 425, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0425
    as

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    References listed on IDEAS

    as
    1. Andrea Mina & Henry Lahr & Alan Hughes, 2013. "The demand and supply of external finance for innovative firms," Industrial and Corporate Change, Oxford University Press, vol. 22(4), pages 869-901, August.
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    More about this item

    Keywords

    Innovation; Capability; Financing Constraints; Family Firms; CDM;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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