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Patents, trade secrets and performance aspirations in family firms

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  • Katrin Hussinger

    (DEM, Université du Luxembourg)

  • Issah Wunnam

    (University of Leicester. UK)

Abstract

We investigate whether family ownership is associated with a preference for patents or trade secrets. Using a sample of S&P 500 firms, we show that family ownership is negatively associated with patenting and positively associated with the usage of trade secrets. We further show that both relationships are moderated by firm performance below the aspiration level, i.e. the performance benchmark level that an organization sets. These results can be explained with a mixed gambles behavioral agency framework. When family firms perform below their aspiration level, prospective financial gains become relatively more important as compared to current socio emotional wealth so that patents become more and trade secrets less attractive.

Suggested Citation

  • Katrin Hussinger & Issah Wunnam, 2025. "Patents, trade secrets and performance aspirations in family firms," DEM Discussion Paper Series 25-11, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:25-11
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    More about this item

    Keywords

    Family firms; patents; trade secrets; mixed gambles; aspiration gap.;
    All these keywords.

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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