Innovation in Family Firms: A Systematic Literature Review and Guidance for Future Research

• Date: 01 July 2019
• Author: Alfredo Massis,Giovanna Campopiano,Mariangela Vecchiarini,Johanna Gast,Andrea Calabrò,Sascha Kraus
• DOI: http://doi.org/10.1111/ijmr.12192
• Published date: 01 July 2019

International Journal of Management Reviews, Vol. 21, 317–355 (2019)

DOI: 10.1111/ijmr.12192

Innovation in Family Firms: A Systematic

Literature Review and Guidance for

Future Research

Andrea Calabr`

o , Mariangela Vecchiarini,1Johanna Gast ,2

Giovanna Campopiano ,3Alfredo De Massis 4and Sascha Kraus 5

IPAG LAB, IPAG Business School, 4 Bd. Carabacel, 06500, Nice, France, 1University of North Georgia, 82 College

Cir., Dahlonega, GA, 30597, USA, 2Montpelier Business School, MRM, 2300, Avenue des Moulins, 34185

Montpellier Cedex 4, France, 3Witten Institute for Family Business (WIFU), University of Witten/Herdecke,

Alfred-Herrhausen-Str. 50, D-58448, Witten, Germany, 4Facultyof Economics and Management, Free University of

Bozen-Bolzano, Universit¨

atsplatz 1, 39100, Bozen, Italy, and Lancaster University, UK, and 5´

Ecole Sup´

erieure du

Commerce Ext´

erieur, ESCE International Business School, 10 rue Sextius Michel, 75015, Paris, France

Corresponding author email: alfredo.demassis@unibz.it

Through a systematic review of 118 peer-reviewed journal articles published between

1961 and 2017, this article provides an integrative picture of the state of the art of

the family firm innovation literature. Our aim is to widen existing understanding of

innovationin family firms by building a theoreticalbridge with studies in the mainstream

innovation literature. Specifically, in identifying the main gaps in the literature and

providing futureresearch directions, our critical and dynamic picture of family-specific

determinants of innovation is intended to advancethe debate on innovation in general,

and family firms in particular.

Introduction

While it is generally accepted that family involve-

ment in ownership, management and governance

affects family firm (henceforth FF) innovation be-

haviour (Carnes and Ireland 2013; Chrisman et al.

2015a), current understanding of the family-specific

antecedents that affect innovation inputs, processes

and outcomes (Carnes and Ireland 2013; K¨

onig et al.

2013) is limited, with a plethora of contradictory

and inconsistent findings, especially in relation to

innovation outputs (Urbinati et al. 2017). In addi-

tion, most research has been conducted by family

business scholars, while mainstream innovation re-

searchers have largely overlooked family variables

in their studies (Chrisman et al. 2015a; Kraus et al.

2012).

Innovation literature has substantially dealt with

small- and medium-sized enterprise (SME) inno-

vation (e.g. Lee et al. 2010; Thorpe et al. 2005),

exploring innovation challenges and opportunities

relative to firm size. For instance, innovation research

points out that SMEs are characterized by quick

decision-making, willingness to take risks and

flexibility in responding to new market opportunities,

so that innovation is more dependent on external

knowledge obtained through partnerships and

spillovers than internal research and development

(R&D) (Love and Roper 2015). Although there are

clearly substantial overlaps between SMEs and FFs,

especially as the majority of the latter are part of

the former, there are also extremely large FFs, as

research on S&P 500 firms shows (e.g. Anderson and

Reeb 2003). We therefore argue that FF innovation

literature deserves a stand-alone discussion that

would benefit from a confrontation and integration

with mainstream innovation literature.

In the last decade, FF scholars have started in-

vestigating to what extent family involvement en-

ables or hampers innovation, as this relationship is

C2018 British Academy of Management and John Wiley & Sons Ltd. Publishedby John Wiley & Sons Ltd, 9600 Garsington

Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA

318 A. Calabr`

oetal.

more complex and multidimensional than predicted.

In fact, scholars have ascribed some characteristics

to FFs that negatively affect innovation, others that

have a positive influence and others still with am-

bivalent features. Negative aspects constraining FF

innovation might be, amongst others, their conserva-

tive posture (Habbershon et al. 2003), organizational

rigidity (Kets de Vries 1993), risk aversion (Mor-

ris 1998), willingness to keep control of the firm

(G´

omez-Mej´

ıa et al. 2007) and limited propensity

to use investment capital to fund innovation projects

(Block et al. 2013). On the positive side, their typical

long-term orientation and the involvementof multiple

generations in the firm foster innovation capabilities

(e.g. Craig and Dibrell 2006; Llach and Nordquist

2010; Zahra et al. 2004). In addition, family culture

and familiness are acknowledged as possible sources

of competitive advantage for innovation, since these

are hard-to-duplicate resources (Zahra et al. 2004),

creating a climate of trust and shared goals (Dibrell

and Moeller 2011). The ambivalence of some aspects,

however, makes it difficult to define an integrative

picture of the state of the art. For instance, FF in-

tergenerational orientation and willingness to ensure

firm survival, preserve prosperity and family wealth

are considered at the same time detrimental, since

FFs may avoid risky innovation projects to protect

their endowment, as well as beneficial, since innova-

tion is consistent with survival instincts and concern

for long-term continuity (Sirmon et al. 2008). This is

in line with a Janus-faced view of innovation in FFs

(Miller et al. 2015) or paradoxical thinking affecting

FF innovation (De Massis et al. 2015a; Ingram et al.

2016).

Stemming from this debate and the strategic impor-

tance of innovation, our literature review organizes

extant knowledge to assess the state of the art, and by

integrating FF and mainstream innovation literature,

presents some promising avenues for future research.

We carry out a systematic literature review to answer

our two main questions: where are we now and where

should we go? With respect to the first question, we

focus on the main relationships investigated in prior

studies on FF innovation and the theoretical lenses

adopted to conceive and support these relationships.

As such, this study detects not only the main gaps,

but also the contradictions. To answer the second

question, we propose several research paths drawing

on currently neglected variables and theories in FF

and mainstream innovation literature. Thus, this

paper builds a conceptual bridge between FF and

mainstream innovation studies and contributes to the

theoretical development of innovation in FFs in a

number of ways.

First, we address the call for additional investiga-

tions into the innovation dynamics in FFs (De Massis

et al. 2015a; Duran et al. 2016) by re-organizing and

consolidating the contributions into different thematic

clusters. This article differs from previous reviews

that consider either only technological innovation(De

Massis et al. 2013; R¨

od 2016) or collaborativeinnova-

tion (Feranita et al. 2017), while we more broadly in-

clude organizational and business model innovation,

or offer future research directions based only on FF

theories and concepts (Filser et al. 2016; Fuetsch and

Suess-Reyes 2017), while weoffer a novel integrative

view building a bridge between FF and mainstream

innovation studies.

By drawing on this literature and theoretically ex-

amining the emerging gaps, we offer promising re-

search paths to improve our understanding of the

phenomenon as well as critical reflections on the the-

ories used so far. We propose advancing the debate

by learning from mainstream innovation literature as

well as from alternative FF frameworksthat have thus

far not been employed to investigateinnovation in the

context of FFs. Similarly, we also suggest what main-

stream innovation literature could learn from FF in-

novation literature, considering the unique elements

of FF innovation for other types of organizations. On

the one hand, this approach will hopefully establish

a springboard to further the discussion on develop-

ing a theory of the innovative behaviour of FFs, and

on the other, engender reciprocal communication be-

tween FF and mainstream innovation research fields,

promoting the advancement and usability of specific

innovation theories to investigate innovation-related

topics in FFs.

A systematic literature review

Our systematic literature reviewrelies on a str uctured,

transparent and reproducible method of selecting and

assessing the scientific contributions (Tranfield et al.

2003). We include only peer-reviewed journal arti-

cles, therefore excluding books, book chapters and

other non-refereed publications, since the review pro-

cess acts as a quality control mechanism that vali-

dates the knowledge such articles afford (Light and

Pillemer 1984; Ordanini et al. 2008).

According to the Handbook of Research on

Family Business (Poutziouris et al. 2008), the first

peer-reviewed article in this field was publishedin an

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Innovation in Family Firms 319

Table1. Systematic literature reviewprocedure

Filter Description

Business Source

Complete/Econlit

Web o f

Science ABI Inform

Elsevier Science

Direct Total

Step 1 Articles with selected keywords 906 808 484 307 2505

After merging the results from the different

databases and deleting duplicate articles

1036

Step 2 After reading the titles and abstracts,

eliminating the non-relevant articles

217

Step 3 After reading the full articles and

eliminating the non-relevant articles

76

Step 4 Hand searching and citation tracking 42

Final sample 118

Search criteria for Business Source Complete and Econlit: Search Modes (Boolean/Phrase); Apply related words; Only Scholarly (Peer-

reviewed)Journals; Published from January 1961 to December 2017; Publication Type (Journal Article); Language (English); Document Type

(All); Geographic Region (All). Search strings: innovat* AND famil* in title or abstract.

Search criteria for Web of Science: Date Range: January 1985–December 2017 (Maximum range available for this database). Citation

Databases: Science Citation Index Expanded (SCI-Expanded) 1985–present; Social Sciences Citation Index (SSCI) 1985–present; Arts

& Humanities Citation Index (A&HCI) 1985–present. Lemmatization Mode On. Document Type (Article); Language (English); Coun-

tries/Territories (All); Web of Science Categories (Management; Business; Family Studies; Economics; Sociology; Social Sciences Inter-

disciplinary; Psychology Developmental; Anthropology; Political Science; Demography; History; Social Issues; Communication; Business

Finance). Search strings: innovat* and famil* in title or topic.

SearchCriteria for ABI Inform: Only Scholarly (Peer-reviewed)Ar ticles; OnlyAcademic Jour nals; Publishedfrom Januar y 1961 to December

2017; Search strings: innovat* and famil* in TI title or AB abstract.

Search Criteria for Elsevier Science Direct: Source (Journal); Subject: Business, Management & Accounting. Search strings: innovat* and

famil* in abstract, title, keywords. Date Range: 1961–present.

academic journal in 1961 (Trow 1961). Hence,

using the 1961–2017 time frame, we searched the

EBSCO Business Source Complete,Econlit,Web

of Science (ISI),ABI Inform and Elsevier Science

Direct databases.

The subsequent search and selection process was

guided by four consecutive steps:

1. Search and elimination of duplicates. Consistent

with prior literature (cf. Keupp et al. 2012; Nielsen

2010; Rashman et al. 2009; Thorpe et al. 2005;

Tranfield et al. 2003), the first step entailed search-

ing the keywords [innovat* and famil*]1in the ti-

tles or abstracts. This procedure resulted in 2505

hits. Due to duplicates, a large number of hits

is rather common in the first round of a system-

atic literature review search (Bakker 2010; Dinh

and Calabr`

o 2018). After cleaning the duplicates

from the list of articles, the sample was reduced

to 1036 titles. By merging the results from dif-

ferent databases and eliminating additional dupli-

cates, the number of articles further reduced to

703, which we then processed in the second step.

1Asterisks (*) at the end of the keywords account for varia-

tions in this root word (e.g. by using famil*, the results will

include all words containing the root ‘famil’, such as family,

familiness, families, etc.).

2. Title and abstract analysis. Following Pukall and

Calabr`

o (2014), after collecting all the results in a

reference-manager software, we read all the titles

and abstracts to assess whether the basic criteria

of relevance were fulfilled (Rashman et al. 2009),

and eliminated those that fell outside our scope

(Adams et al. 2016; Bakker 2010; Keupp et al.

2012). We considered as non-relevant the articles

not investigating innovation in FFs, as in those

publications the words starting with innovat* (in-

cluded in the tile and/or abstract) were in fact used

to refer to the innovativeness of the study or the

innovativenessof a certain methodology, not inno-

vation itself. A total of 217 studies were admitted

to the next step.

3. Full text assessment. The third step entailed re-

trieving the 217 articles and reading the full texts

(Bakker 2010; David and Han 2004). After a com-

prehensive assessment, we admitted 76 studies to

the final sample.

4. Hand searching. Finally, through hand searching

and citation tracking (Adams et al. 2016; Nabi

et al. 2017; Rashman et al. 2009), we included

a further 42 articles leading to a final sample of

118 publications. The above-described steps are

presented in Table 1.

C2018 British Academy of Management and John Wiley & Sons Ltd.