Innovation characteristics of young and old family‐owned businesses

Abstract

Purpose

The purpose of this study is to examine characteristics and factors affecting innovation in young and old family‐owned businesses. The research focuses on three important factors to innovation: organisation type, age and size; covering gaps in existing literature.

Design/methodology/approach

A postal survey of 500 small family‐owned businesses across sectors in the UK is conducted. The study uses regression analysis to test effects of environment, innovation strategy, family culture, family involvement, owners' background and learning on innovation in young and old family businesses as well as innovation effect on their financial performance.

Findings

The findings suggest social capital theory to be extended to include non‐family employees in the innovation process of family firms, and formal learning has a positive impact on young firms' innovation. Market condition, industry sector, business goal and long‐term orientation positively affect family firm innovation.

Originality/value

This paper makes valuable contributions to the understanding of theory and practices of innovation in family businesses. It has policy implications.

Citation

Laforet, S. (2013), "Innovation characteristics of young and old family‐owned businesses", Journal of Small Business and Enterprise Development, Vol. 20 No. 1, pp. 204-224. https://doi.org/10.1108/14626001311298493