While extant research has emphasized the importance of exploration activities in obtaining superior innovation performance, there is an unsolved debate about whether internal exploration is more effective than external one. We address this issue by searching for the direct effects of the two types of exploration on innovation output on a sample of firms in the Life Sciences sector. Besides, building on the assumption that governance forms play a role in the innovation process, this paper focuses on how family involvement – the source of most ubiquitous form of firms’ governance – affects firm’s resources and capabilities and hence innovation performance. In addition, our post-hoc analyses also investigate the complementary rather than substitutive role of the two types of exploration, for both family and non-family firms. We use a count data model to evaluate the direct impact of internal and external exploration, and the moderating role of family involvement on innovation performance (the number of patents filed between 2008 and 2013). Data have been collected in 151 firms from an Italian Life Science Cluster. If many scholars have shown decreasing returns to scale in R&D expenditures (as a proxy of the internal exploration) our results show that internal exploration alone negatively affects firm's innovation performance in absolute terms; on the contrary, external exploration positively affects innovation performance as the majority of scholars argues. The interaction between the two behaviors is positive, suggesting the existence of a joint effect between the two behaviors where a low level of internal absorptive capacity ensures the best effectiveness of external exploration. In both cases, family involvement positively moderates the relationship. In addition, while both family and non-family firms obtain better innovation performance when external exploration is high and internal is low, family involvement acts as an optimal bridge between the two and the best marginal effect for family involvement is obtained when firms jointly pursue both exploration types.
In or Out? Exploration Patterns and Innovation Performance in Family Firms from an Italian Life Science Cluster
BRUMANA, Mara;MINOLA, Tommaso;
2015-01-01
Abstract
While extant research has emphasized the importance of exploration activities in obtaining superior innovation performance, there is an unsolved debate about whether internal exploration is more effective than external one. We address this issue by searching for the direct effects of the two types of exploration on innovation output on a sample of firms in the Life Sciences sector. Besides, building on the assumption that governance forms play a role in the innovation process, this paper focuses on how family involvement – the source of most ubiquitous form of firms’ governance – affects firm’s resources and capabilities and hence innovation performance. In addition, our post-hoc analyses also investigate the complementary rather than substitutive role of the two types of exploration, for both family and non-family firms. We use a count data model to evaluate the direct impact of internal and external exploration, and the moderating role of family involvement on innovation performance (the number of patents filed between 2008 and 2013). Data have been collected in 151 firms from an Italian Life Science Cluster. If many scholars have shown decreasing returns to scale in R&D expenditures (as a proxy of the internal exploration) our results show that internal exploration alone negatively affects firm's innovation performance in absolute terms; on the contrary, external exploration positively affects innovation performance as the majority of scholars argues. The interaction between the two behaviors is positive, suggesting the existence of a joint effect between the two behaviors where a low level of internal absorptive capacity ensures the best effectiveness of external exploration. In both cases, family involvement positively moderates the relationship. In addition, while both family and non-family firms obtain better innovation performance when external exploration is high and internal is low, family involvement acts as an optimal bridge between the two and the best marginal effect for family involvement is obtained when firms jointly pursue both exploration types.File | Dimensione del file | Formato | |
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