Family firms and innovation: The role of ventured start-ups

Technological innovation can be defined as the set of activities through which a firm conceives, designs, manufactures, and introduces a new product, technology, system or technique (Freeman, 1976). It can take place according to different strategies: through internal R&D and by mean of external knowledge acquisition (Cassiman and Veugelers, 2006). Extant studies are predominantly focused on the analysis of the “internal perspective”, while there is a research gap on how firms can reach technological innovation by mean of venture capital initiatives (Dushnitsky and Lenox, 2005). The present paper aims to fill this gap by focusing on how family small and medium entities (SMEs) may develop technological innovations by creating ventured start-ups. In particular, considering the previous studies which identified the family firms’ peculiar characteristics in terms of processes like corporate governance (Randoy and Goel, 2003), internationalization (Zahra, 2003), entrepreneurship (Naldi et al., 2007) and financing (Romano et al., 2001), the research investigates how the family firm’s ownership structure affects its technological innovation activities and outcomes (Hoskisson et al., 2002).