Family firm heterogeneity and innovation: the role of firm origin and family involvement

Firm origin is an important yet underexplored factor to innovation performance heterogeneity within family firms in emerging economies. Not all family firms are founded by owning families since inception, some are established indirectly through privatization of state-owned enterprises (SOEs). Adopting the institutional logics perspective, we posit that SOE-transformed family firms—plagued by contradictions between the central planning-based state socialism logic and the competition-based market logic—invest less in innovation but utilize their investment more efficiently than born family firms. Nonetheless, this utilization efficiency diminishes when family involvement in management becomes high because the extra competition between family interest-based logic and state and market logics exacerbate within-firm conflicts. Data from 1,755 Chinese listed family firms over the period 2009–2019 supported our hypotheses. The present study extends family firm heterogeneity and institutional logics research by revealing origin-induced institutional complexity and its impact on the innovation behaviors of family firms.