Technological Innovation Inputs, Outputs and Performance: the moderating role of Family Involvement in Management

Technological+innova-on:+the+role+of+family+management+ Technological+Innovation+ Inputs,+ Outputs+and+Performance:++ the+moderating+role+of+Family+ Involvement+in+Management+ Julio+Diéguez9Soto1,++Montserrat+Manzaneque9 Lizano2,++Alfonso+Rojo9Ramírez3+ ! ! 1Universidad!de!Málaga,!! ! 2Universidad!de!Cas3lla4La!Mancha,! 3Universidad!de!Almería+ Technological+innova-on:+the+role+of+family+management+ +strengthens+its+leading+position+in+Germany's+ automotive+industry+with+the+opening+of+its+new+Chassis+Innovation+ Center+in+Bielefeld+ “For!us!the!R!&!D!is!a!priority.!We!believe!that!innova3on!is!a!key!factor!for!success! through!differen3a3ng!our!products!and!services.During!the!process!of!concep3on,! design! and! produc3on! of! a! product,! we!focus!on!reducing!weight! and! increasing! passive!safety!“(hNp://www.gestamp.com)! ! Technological+innova-on:+the+role+of+family+management+ General'aims'of'the'study' ' ' ' ' • 'To! enhance! the! understanding! of! exis3ng! models! of! antecedents! and! effects! of! technological! innova3on! (TI)! in! SMEs!! ! • To! compare! antecedents! and! effects! of! TI! in! family! and! nonfamily!managed!firms' ' Technological+innova-on:+the+role+of+family+management+ Theory'development'and'hypotheses'! + Figure+1.+Proposed+theore-cal+model! Technological+innova-on:+the+role+of+family+management+ Theory'development'and'hypotheses'' R&D'intensity'and'con9nuous'technological'' innova9on'outcomes' ' • The!R&D!effort!4determinant!of!technological!innova3on4!(Souitaris,!1999)! • +!Rela3onship!between!R&D!intensity!and!TI!(Chu,!2009;!Mansfield,!1981).!! • Some!lag!between!R&D!spending!and!research!outcomes!(Chin!et!al.,!2009)!! • R&D!resources!are!vital!to!achieve!CTI!(Shang!et!al.,!2010)!over!3me!(Damanpour!&! Evan,!1984)!! + + H1:+ R&D+ intensity+ has+ a+ posi-ve+ effect+ on+ the+ occurrence+ of+ con-nuous+technological+innova-on+(CTI)+outcomes.! ' Technological+innova-on:+the+role+of+family+management+ Theory'development'and'hypotheses'' R&D'intensity,'con9nuous'technological'innova9on'' outcomes'and'family'management' ! • Family!Ownership!is!detrimental!to!R&D!intensity!(e.g.!Block,!2012)!! • It!is!con3ngent!on!the!economic!performance!levels!below!the!family’s!aspira3ons! (Christman!&!Patel,!2012)!or!the!overlap!family!wealth/firm!equity!(Sciascia!et!al.,! 2014).!! • Concerning! the! outcomes!of!innova3on! ac3vity:! inconsistent! and! inconclusive! findings!(Nordqvist,!2010;!Westhead,!1997).! • RBV! have! argued! for!resource! orchestra3on! advantages!(Sirmon,! HiN,! Ireland,! &! Gilbert,!2011),!while!BAM!have!suggested!that!FBs!underinvest!in!R&D!(Chrisman!&! Patel,!2012;!Kotlar!et!al.,!2013).! • Chrisman!et!al.!(2015):!superior!ability!to!innovate!yet!lower!willingness!to!engage! in!technological!innova3on!(the!paradox)!! • Duran!et!al.!(2015):!that!family!control!undermines!innova3on!input!but!that!these! very!same!aNributes!translate!into!superior!innova3on!output!! + ' Technological+innova-on:+the+role+of+family+management+ Theory'development'and'hypotheses'' R&D'intensity,'con9nuous'technological'innova9on'' outcomes'and'family'management' ! • As!there!has!been!liNle!research!on!whether!family!firms!are!more!efficient!than! non4family!firms!in!the!conversion!process!of!innova3on!input!into!output! • and! we! have! very! limited! insights! about! whether! family! firms! generate! more! efficiently!economic!consequences!from!technological!innova3on!than!non4family! firms:! 4 We!propose!that!the!level!of!family!management!could!act!as!a!driver!of!the!ability! and!willingness!paradox!influencing!technologic!innova3on!efficiency.!! 4 Family!management!dimension!is!more!apt!to!reflect!a!family`s!SEW!agenda!and!its! consequences!(Gomez4Mejia,!Cruz,!et!al.,!2011).!! 4 We!expect!the!pursuit!of!SEW!may!affect!the!rela3onship!between!R&D!intensity! and!the!existence!of!con3nuous!technological!innova3on!outputs!and!between!the! latest!and!long4term!performance.!! Technological+innova-on:+the+role+of+family+management+ Theory'development'and'hypotheses'' R&D'intensity,'con9nuous'technological'innova9on'' outcomes'and'family'management' ! Family'management''may'limit'the'conversion'of'R&D'ac9vi9es'into'CTI.!! Less!Willingness! • Invest!less!intensively,!reluctant!to!jeopardize!their!discre3on!(Classen!et!al.,!2012)! and! their! wealth! (Zahra,! 2005).! Resource4constraining! SEW! agenda.! Risk! adverse! managers/modest!innova3ons.! • Lack!of!execu3ve!talent,!limited!pool!of!human!capital!(Block,!et!al.,!2013).!Known! for!taking+assets+out+(Sirmon!&!HiN,!2003).! Less!ability! • Entrepreneurial!spirit!and!talent!not!necessarily!inherited!(Chrisman!et!al.,!2005).!! + H2:+ Family+ management+ has+ a+ nega-ve+ influence+ in+ the! rela-onship+between+R&D+intensity+and+the+occurrence+of+CTI! ! + ' Technological+innova-on:+the+role+of+family+management+ Theory'development'and'hypotheses'' Technological''innova9on'outcomes'and'sustained'' firm'performance' ' • The!significance!of!the!TI!outcomes'≠'their!specific!economic!consequences.!! • The!relevance!of!TI!outcomes!will!come!with!their!impact!on!economic!growth!and! firm!performance!(Hall!et!al.,!2005;!He!&!Wang,!2008;!Schumpeter,!1942).!! • Previous! research! supports! the! view! that! TI! is! a! major! influence! on! industrial! compe33veness!and!na3onal!development!(Tidd,!2002).!! ! + H3:+The+existence+of+technological+innova-on+outcomes+have+a+ posi-ve+effect+on+long9term+performance.! + ' Technological+innova-on:+the+role+of+family+management+ Results'(H1:'Fixed'effects)' Effect+of+R&D+intensity+on+con-nuous+technological++innova-on+outcomes+(H1)!!! Variables Predicted sign Model 1.1. Model 1.2. Model 1.3. Model 1.4. OLS Random Effects Fixed Effects Fixed effects with heterogeneity control RDI + 2.301** (1.19) 2.983*** (0.753) 3.133*** (0.749) 3.133** (1.872) SIZE + 0.282*** (0.013) 0.183*** (0.028) 0.022 (0.046) 0.022 (0.087) AGE - 0.004*** (0.001) -0.003 (0.003) -0.019*** (0.005) -0.019** (0.009) Intercept -2.851*** (0.235) -1.057** (0.551) 2.005*** (0.702) 2.005 (1.335) Industry effects Yes Yes Lagrange multiplicator tests 10657.87*** Hausman test 61.61*** F test 55.30*** [22, 5956] 11.30*** [3, 5425] 2.02 [3, 550] Wald Chi2 141.42*** (22) R2 0.17 Within 0.0010 0.0062 0.0062 Between 0.2180 0.0304 0.0304 Overall 0.1530 0.0213 0.0213 Modified Wald test for heteroskedasticity 1.4e+31*** [551] Number of firms 551 551 551 551 Technological+innova-on:+the+role+of+family+management+ Results(H2:'Fixed'effects)' Modera-ng+effect+of+family+management+on+the+rela-onship+between+R&D++ intensity+and+con-nuous+technological+innova-on+outcomes+(H2)!! Variables Predicted sign Model 2.1. Model 2.2. Model 2.3. Model 2.4. OLS Random Effects Fixed Effects Fixed effects with heterogeneity control RDI + 5.239*** (2.109) 7.808*** (1.358) 8.083*** (1.354) 8.083*** (2.402) RDI*FAMILY - -4.297** (2.551) -7.006*** (1.643) -7.184*** (1.638) -7.184*** (2.834) SIZE + 0.282*** (0.013) 0.184*** (0.028) 0.026 (0.046) 0.026 (0.086) AGE - 0.004*** (0.002) -0.003 (0.002) -0.020*** (0.005) -0.020*** (0.009) Intercept -2.848*** (0.235) -1.064** (0.550) 1.963*** (0.700) 1.963 (1.331) Industry effects Yes Yes Lagrange multiplicator tests 10692.41*** Hausman test 60.50*** F test 53.04*** [23, 5955] 13.31*** [4, 5424] 3.91*** [4, 550] Wald Chi2 159.57*** (23) R2 0.17 Within 0.0037 0.0097 0.0097 Between 0.2165 0.0289 0.0289 Overall 0.1529 0.0187 0.0187 Modified Wald test for heteroskedasticity 1.4e+31*** [551] Number of firms 551 551 551 551 Number of observations 5979 5979 5979 5979 Technological+innova-on:+the+role+of+family+management+ Results(H3:'Fixed'effects)' Effect+of+technological+innova-on+outcomes+on+long9term+performance(H3)!' Variables Predicted sign Model 3.1. Model 3.2. Model 3.3. Model 3.4. OLS Random Effects Fixed Effects Fixed effects with heterogeneity control TI + 0.002 (0.001) 0.004*** (0.002) 0.001 (0.001) 0.001 (0.001) SIZE + 0.006*** (0.001) 0.009*** (0.001) 0.021*** (0.002) 0.021*** (0.005) AGE - -0.001*** (0.001) -0.002*** (0.001) -0.008*** (0.001) -0.008*** (0.001) Intercept -0.005 (0.011) -0.009 (0.025) -0.011 (0.036) -0.011 (0.079) Industry effects Yes Yes Lagrange multiplicator tests 6130.60*** Hausman test 985.61*** F test 13.43*** [22, 7081] 417.78*** [3, 6527] 77.05*** [3, 550] Wald Chi2 317.04*** (22) R2 0.04 Within 0.1453 0.1611 0.1611 Between 0.0074 0.0039 0.0039 Overall 0.0121 0.0001 0.0001 Modified Wald test for heteroskedasticity 3.7e+05*** (551) Number of firms 551 551 551 551 Number of observations 7081 7081 7081 7081 Technological+innova-on:+the+role+of+family+management+ Results(H4:'Fixed'effects)' Modera-ng+effect+of+family+management+on+the+rela-onship+between+ +technological+innova-on+outcomes+and+long9term+performance+(H4)! ' Variables Predicted sign Model 1 Model 2 Model 3 Model 4 OLS Random Effects Fixed Effects Fixed effects with heterogeneity control TI + 0.003** (0.002) 0.003** (0.002) -0.001 (0.002) -0.001 (0.002) TI*FAMILY + -0.003 (0.002) 0.001 (0.003) 0.004** (0.003) 0.004 (0.003) SIZE + 0.005*** (0.001) 0.009*** (0.001) 0.021*** (0.002) 0.021*** (0.005) AGE - -0.001 (0.001) -0.002*** (0.001) -0.008*** (0.001) -0.008*** (0.001) Intercept -0.004 (0.011) -0.009 (0.025) -0.009 (0.036) -0.009 (0.079) Industry effects Yes Yes Lagrange multiplicator tests 6125.94*** Hausman test 980.14*** F test 12.90*** [23, 7057] 314.10*** [4, 6526] 58.84*** [4, 550] Wald Chi2 317.31*** (23) R2 0.04 Within 0.1454 0.1614 0.1614 Between 0.0073 0.0040 0.0040 Overall 0.0121 0.0001 0.0001 Modified Wald test for heteroskedasticity 3.7e+05*** (551) Number of firms 551 551 551 551 Number of observations 7081 7081 7081 7081 Technological+innova-on:+the+role+of+family+management+ Findings'and'Contribu9ons' ! • This' ar9cle' provides' new' insights' into' the' effect' of' family' management'on'the'conversion'of'R&D'intensity'into'the'con9nuous' ocurrence'of'innova9on'outcomes'' • as'well'as'the'produc9vity'of'the'firm'in'terms'of'genera9ng'longCterm' performance'from'technological'innova9on'outputs.'' ! • Family! management! acts! as! a! driver! of! less! ability! and! willingness! to! carry!out!TI!outcomes!efficiently,!exer3ng!a!nega3ve!influence.!! • Less! ability! and! willingness! expressed! as! a! constraining! SEW! agenda,! focus!in!modest!innova3ons,!lack!of!execu3ve!talent,…could!hinder!the! efficient! conversion! of! R&D! expenditures! into! the! ocurrence!of! con3nuous!technological!innova3on!outcomes.!! Technological+innova-on:+the+role+of+family+management+ Conclusions' • But,! our! findings! also! show! that! once! family4managed! firms! have! obtained! TI! outcomes,! they! are! able! to! achieve! greater! long4term! performance!than!non4family!firms.!! • It!seems!that!they!become!competent!and!sensi3ve!to!shape!their!firm´s! strategy! if! long4term! performance! is! not! appropriate! because! it! would! involve! losses! in! terms! of! economic! and! non4economic! family4centred! goals.!! • They!put!all!its!social!capital!into!opera3on!to!show!improvement!in!the! conversion! of! the! existent! innova3on! outcomes! into! long4term! performance.! Technological+innova-on:+the+role+of+family+management+ Thanks+for+your+attention!+ +Málaga+ +Almería+ +Cas-lla.9La+ Mancha+