Innovation in family firms has become a central topic in business strategy, with a large and growing body of research. Given the dynamic and highly competitive environment, both family and non-family firms are compelled to innovate to adapt and maintain a sustainable competitive advantage. This study analyses the paradoxical relationship between familiness and business innovation using a sample of family- and non-family-owned companies.
The empirical analysis draws on a sample of 106 Spanish hotel chains, encompassing both family-owned and non-family-owned firms. Following recent research that has refined techniques based on structural equation modelling, the method of analysis used was PLS-SEM. Non-linear relationships and moderating effects were examined.
This research finds empirical evidence of a non-linear relationship between family ownership and innovation. Furthermore, our findings indicate that the presence of a family chief executive officer (CEO) negatively moderates the relationship between ownership and innovation, suggesting that a family CEO may hinder innovation within family firms.
The innovation paradox in family firms has been the subject of considerable scholarly attention in recent years. Nevertheless, it is interesting to analyse these issues by considering a sample of family and non-family companies to improve business management literature. Furthermore, advanced analytical techniques are needed to uncover relationships beyond linear relationships.
