The Role of Family Firm on the Relationship between KMP and Innovation

Given the central role of knowledge management practices (KMP) in fostering innovation, besides the distinctive characteristics of family firms (FF) regarding their innovative behaviour and results, this paper addresses two main objectives. Firstly, it deepens in the study of the relationship between five KMP -acquisition, creation, storage, transfer and application- and innovation. Secondly, we explore whether being a FF moderates the KMP- innovation relationship, a question that, to our knowledge, has not been explored to date. The empirical study to test these relationships uses data from 238 Spanish SMEs and is based on a linear regression by OLS over the dependent variable. Our results show that, consistent with the extant research, creation and storage KMP have a positive and significant effect on firm innovation whereas, contrary to previous research, no significant effect of acquisition, application and transfer KMP on firm innovation has been found. This study also finds the effect of investing in the creation and storage of new knowledge on innovation is less positive, or even negative, among FF, a result coherent with the lower level on R&D investment among FF reported by previous literature. We also found that being a FF positively moderates the negative, non-significant, link between transfer KMP and innovation, pointing to a higher efficiency of family firms in transforming knowledge transfer in innovation.