Developing digital innovation in family firms: evidence from Italian industrial districts

The rise of new digital technologies related to the contemporary industrial revolution (better known as Industry 4.0) has deeply affected firms’ business models and their traditional sources of competitive advantage. Manufacturing firms located in Marshallian Industrial Districts (MIDs) are no exception. While being localized in MIDs typically fosters firms’ innovativeness, there is an “intra-district heterogeneity” because not all of them are able to recognize and exploit the externalities and resulting localization economies. Drawing on a sample of 152 Italian firms located in five different Italian industrial districts, our chapter tests the family status of the firm as a source of intra-district heterogeneity. Our results reveal that family firms are more engaged in digital innovation than non-family firms. Due to their firm-specific social capital and embeddedness in local district networks, family firms are better able to alter the social and economic relationships underlying the dissemination of knowledge and information in MIDs, which is relevant for digital innovation adoption and exploitation