Family-managed firms, external sources of knowledge and innovation

This study examines the influence of external sources of knowledge on innovation in a sample of Spanish manufacturing firms during the period 2002-2015. By differentiating firms according to their family status, our results reveal that the probability of engaging in product and process innovations is higher for family-managed firms involved in R&D cooperation with a varied group of partners. Additionally, our findings provide support for the role of R&D-oriented family-managed firms in easing the flow of knowledge and information for innovation at regional level (i.e. family firm-led knowledge spillovers). Because of their unique social capital and embeddedness in the local setting, family-managed firms contribute to creating a favourable regional environment for innovation for all co-located firms. However, this result holds only when the geographical concentration of R&D-oriented family-managed firms is coupled with technological proximity. Theoretical, policy and managerial implications are discussed.