Factors of Innovation in Family Businesses in Mexico
Factores de innovación en las empresas familiares en México
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This study aims to examine whether family firms are more effective in implementing innovation strategies than nonfamily firms. Based on work by Carney (2005) and Ansoff (1985), we consider the specific characteristics of the strategic innovation process that takes place in family firms, namely, parsimony, personalism, and particularism. These features were used to identify some attributes of ownership, strategic management, and governance structure in family firms that contribute in the materialization of innovations into new businesses, products and processes. We use an ANOVA test to compare innovation results in a broad sample of 1,496 Mexican non-listed firms, mainly SMEs, and a logit model for regressing innovation factors onto innovation results among family firms. The findings indicate that Mexican family firms outperform nonfamily firms in innovation, highlighting the role of ownership, strategy, and governance. This evidence informs recommendations for family business practitioners on designing organizational structures that enhance innovative capacity.
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