Innovation Capabilities and Financing Constraints of Family Firms

41 Pages Posted: 22 Dec 2015

See all articles by Dorothea Schaefer

Dorothea Schaefer

German Institute for Economic Research (DIW Berlin); JIBS

Andreas Stephan

Jonkoping University, Jonkoping International Business School

Jenniffer Solórzano Mosquera

Jonkoping University - Jonkoping International Business School (JIBS)

Date Written: December 2015

Abstract

Using the 2007 Mannheim innovation survey, we investigate whether family firms are more financially constrained than other firms and how this affects both innovation input as well as innovation outcomes such as market and firm novelties or process innovations. Based on the CDM framework, estimation of the recursive system of equations shows that family businesses are more likely to be constrained and have, on average, lower innovation input. Surprisingly, however, this does not reduce their innovation outcomes as, on average, family firms have the same level of innovation outcomes as non-family firms.

Keywords: Innovation, Capability, Financing Constraints, Family Firms, CDM

JEL Classification: G32, O32

Suggested Citation

Schaefer, Dorothea and Stephan, Andreas and Solórzano Mosquera, Jenniffer, Innovation Capabilities and Financing Constraints of Family Firms (December 2015). DIW Berlin Discussion Paper No. 1536, Available at SSRN: https://ssrn.com/abstract=2707028 or http://dx.doi.org/10.2139/ssrn.2707028

Dorothea Schaefer

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany
+49 30 8978 9162 (Phone)
+49 30 8978 9104 (Fax)

JIBS ( email )

Jönköping, 55111
Sweden

Andreas Stephan (Contact Author)

Jonkoping University, Jonkoping International Business School ( email )

SE-551 11 Jonkoping
Sweden
55111 (Fax)

Jenniffer Solórzano Mosquera

Jonkoping University - Jonkoping International Business School (JIBS) ( email )

Jönköping, 55111
Sweden

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