Does too much love hinder innovation? Family involvement and firms’ innovativeness in family-owned Small Medium Enterprises (SMEs)

Abstract

Current literature suggests that family involvement has an impact on firm innovativeness, but it is not able to explain in which conditions. Adopting a curvilinear model, (Olson’s circumplex model of family) this research demonstrates that the family's cohesion and flexibility levels play a significant role in the relationship between family involvement and firm innovation propensity.This paper also provides evidence for the theory that previous research limitations are due to the fact that they posit a linear relationship between family involvement and innovativeness. Instead, the Circumplex curvilinear model shows a better fit for explaining the family involvement impact on innovation propensity.