How do Family and Social Capital Stimulate a Firm’s Innovative performance?


Dr. Anita van Gils, Organisation and Strategy

Co-operation with Syntens, LWV, various SMEs.

Further information

Since the Lisbon Agenda has been developed in 2000, stimulating innovation is one of the top priorities of European countries in order to become a more knowledge-based society and to spur economic growth. In these societies, family firms are the predominant form of business (70-90% of all companies). They provide extensive contributions to gross national products (40-60%) and job generation (35-70%). Moreover, empirical evidence illustrates that these firms outperform other businesses on a number of financial indicators. Innovation (product, process, market or organizational) seems to be one of their important success factors.

Although the family business literature claims that family and social capital are at the basis of family firm’ s successful development, the impact of these resources on the firm’s innovative performance has hardly been explored. This study will examine how familiness, social relations, history, memory and values affect the strategic behaviour and the innovative performance of family SMEs (small and medium-sized companies), as this group represent almost 90% of all family firms. This project (see appendix 1) aims to lay a solid theoretical foundation for the analysis of innovative behaviour in small and medium-sized family firms. Starting from organizational behaviour, strategic management and agency theory, I will develop and empirically test models explaining the innovative performance of family busineses. Subsequently, the effects of the firm’s resources, the family- and business-related goals and the firm’s governance structure will be examined.

This study will not only contribute to the development of a theory of the family firm; its results can also be used to analyze and further develop resources and innovation capabilities within non-family businesses. The aims of the project are to fuel innovativeness and survival amongst a larger group of family and non-family businesses and to stimulate the development of an innovative and knowledge-based economy.