Unleashing family firms' potential to do more with less: product innovation efficiency, family involvement in TMTs and technological collaborations

Purpose This paper aims to examine the influence of family involvement in TMTs on product innovation efficiency and the contingent role of technological collaborations, combining insights from the resource-based view and the behavioral agency model. Design/methodology/approach This study empirically develops and tests the hypotheses using a longitudinal sample of 3,852 firm-year observations from Spanish manufacturing firms over the period 2006-2016. Findings The results reveal that family involvement in TMTs positively influences product innovation efficiency. The results also show that such positive effect is weakened as technological collaborations increase, and varies according to the partner type with whom the cooperation agreement is established. Specifically, the findings indicate that collaboration with suppliers appear to be the least detrimental for product innovation efficiency in family firms, followed by collaborations with customers and research organizations. Practical implications Family firms should consider appointing family members to their TMT to improve product innovation efficiency. Moreover, to enhance the effect of family management on product innovation efficiency, family managers should carefully select their technological partners. Originality/value This study is one of the first studies to theoretically explain and empirically demonstrate that family involvement in TMTs is a critical antecedent of product innovation efficiency and that technological collaborations moderate such link. Moreover, this study goes further in revealing that distinct types of partners have a differential moderating influence on the family involvement in TMTs-product innovation efficiency relationship. The results can be used to help managers and practitioners to boost innovation performance as well as to assist policymakers to design firm-level innovation policies to improve family firms' competitiveness.