Do HR Practices Influence Open Innovation? The Role of Family Control from an External Social Capital Perspective

In the modern business environment, characterised by complexity and scarcity of resources, open innovation is crucial, which requires the development of external social capital. We study the role of HR initiatives on open innovation, we argue investing in the wellbeing of employees might engender the engagement of employees in open innovation, contributing to developing the firm’s external social capital. Moreover, we acknowledge that the deployment of social capital might differ depending on family control. Through empirical analysis we reveal a positive relationship between HR practices and open innovation. We find that the more employees are taken care of the more they engage in developing the firm’s external social capital necessary to kick-off open innovation projects. Moreover, our findings show a negative moderating effect of family control. This study holds important implications for firms seeking to engage in open innovation, and to understand the importance of HR practices and family control.