Organizational, local, and global innovativeness of family-owned SMEs depending on firm-individual level characteristics: evidence from the Czech Republic
DOI:
https://doi.org/10.24136/eq.2021.006Keywords:
innovation, SMEs, succession, family-owned businesses, legal formAbstract
Research background: Comparing to larger businesses, SMEs encounter more problems in their operations. Since innovativeness enables SMEs to be more competitive against their rivals, having more innovative activities might make SMEs overcome these issues. Nevertheless, depending on businesses-founders/owners' characteristics, SMEs' innovativeness in organizational, local, and global extents might differ.
Purpose of the article: This research explores differences in family-owned SMEs' innovativeness regarding the age of their founders/entrepreneurs, legal form, and succession of these businesses.
Methods: The researchers used a questionnaire survey. Data collection process was completed in 2020. The research sample includes 343 family-owned SMEs that operate in Czechia. The normality test result directs the authors to perform an Independent sample T-test to find differences between selected variables.
Findings & value added: According to the obtained results, global innovativeness does not differ depending on firms-owners/entrepreneurs' characteristics. However, limited liability firms perform better in local innovativeness than other firms structured in different legal forms. Moreover, the organizational innovativeness of SMEs with successors is greater than firms without successors. While organizational innovativeness does not differ depending on entrepreneurs/founders' age and legal structure of businesses, local innovativeness does not differ depending on entrepreneurs/founders' age and successors' existence in these businesses. The educational level of entrepreneurs/founders, sector, and SMEs' location might be reasons for similarities and differences between SMEs' innovativeness. From the policy perspective, based on the obtained results, the authors suggest creating industrial zones. Furthermore, policymakers' collaborations with other essential players in the market might stimulate innovative attitudes among businesses. This paper's main contribution to the existing literature is to fill the gap regarding organizational, local, and global innovativeness of family-owned SMEs by providing detailed and empirical results about entrepreneurs' and firms' characteristics. Thus, this paper might draw businesses, policymakers, academicians, and international readers' attention concerning family-owned SMEs' innovativeness.
Downloads
References
Angelova, M., Pastarmadzhieva, D., Georgiev, P., & Dimitrova, G. (2018). An innovative model for business financing in wine production. Journal of International Studies, 11(4), 106?119. doi: 10.14254/2071-8330.2018/11-4/8.
DOI: https://doi.org/10.14254/2071-8330.2018/11-4/8
View in Google Scholar
Ayyagari, M., Demirguc-Kunt, A., & Maksimovic, V. (2011). Firm innovation in emerging markets: the role of finance, governance, and competition. Journal of Financial and Quantitative Analysis, 46(6), 1545?1580. doi: 10.1017/S002210 9011000378.
DOI: https://doi.org/10.1017/S0022109011000378
View in Google Scholar
Bilan Y., Mishchuk, H., Roshchyk, I. & Joshi, O. (2020a). Hiring and retaining skilled employees in SMEs: problems in human resource practices and links with organizational success. Business: Theory and Practice, 21(2), 780?791. doi: 10.3846/btp.2020.12750.
DOI: https://doi.org/10.3846/btp.2020.12750
View in Google Scholar
Bilan, Y., Hussain, H. I., Haseeb, M., & Kot, S. (2020b). Sustainability and economic performance: role of organizational learning and innovation. Engineering Economics, 31(1), pp. 93?103. doi: 10.5755/j01.ee.31.1.24045.
DOI: https://doi.org/10.5755/j01.ee.31.1.24045
View in Google Scholar
Bilan, Y., Mishchuk, H., Samoliuk, N., & Mishchuk, V. (2020c). Gender discrimination and its links with compensations and benefits practices in enterprises. Entrepreneurial Business and Economics Review, 8(3), 189?204. doi: 10.1567 8/EBER.2020.080311.
DOI: https://doi.org/10.15678/EBER.2020.080311
View in Google Scholar
Chipunza, L. T., & Naong, M. N. (2020). Demographic variables as drivers of innovation in small accommodation businesses: a case of South Africa and Zimbabwe. African Journal of Science, Technology, Innovation and Development. Advance online publication. doi: 10.1080/20421338.2020.1794520.
DOI: https://doi.org/10.1080/20421338.2020.1794520
View in Google Scholar
Coen Rigtering, J. P., Kraus, S., Eggers, F., & Jensen, S. H. (2014). A comparative analysis of the entrepreneurial orientation/growth relationship in service firms and manufacturing firms. Service Industries Journal, 34(4), 275?294. doi: 10.1080/02642069.2013.778978.
DOI: https://doi.org/10.1080/02642069.2013.778978
View in Google Scholar
Czech Statistical Office (2017). GDP in current prices. Retrieved from: http://apl.czso.cz /pll/rocenka/rocenka.presmsocas.
View in Google Scholar
Daszkiewicz, N. (2019). Internationalisation patterns of Polish family high-tech firms. Entrepreneurial Business and Economics Review, 7(4), 147?163. doi: 10.15678/EBER.2019.070409.
DOI: https://doi.org/10.15678/EBER.2019.070409
View in Google Scholar
European Family Businesses (2016). Retrieved from: http://www.europeanfamily businesses.eu/family-businesses/facts-figures; http://www.europeanfamilybusi nesses.eu/uploads/EFB_Brochure.pdf.
View in Google Scholar
Filser, M., De Massis, A., Gast, J., Kraus, S., & Niemand, T. (2018). Tracing the roots of innovativeness in family SMEs: the effect of family functionality and socioemotional wealth. Journal of Product Innovation Management, 35(4), 609?628. doi: 10.1111/jpim.12433.
DOI: https://doi.org/10.1111/jpim.12433
View in Google Scholar
Frešer, B., & Tominc, P. (2018). Innovativeness and financial resources diversity of Slovenian early-stage enterpreneurs. Review of Contemporary Entrepreneurship, Business, and Economic Issues, 31(1), 21?34. doi: 0000-0001-7172-2316.
View in Google Scholar
Goel, R. K., & Nelson, M. A. (2020). How do firms use innovations to hedge against economic and political uncertainty? Evidence from a large sample of nations. Journal of Technology Transfer. Advance online publication. doi: 10.1007/s10961-019-09773-6.
DOI: https://doi.org/10.1007/s10961-019-09773-6
View in Google Scholar
Grundström, C., Oberg, C., & Ronnback, A. O. (2011). View and management of innovativeness upon succession in family-owned SMEs. International Journal of Innovation Management, 15(3), 617?640. doi: 10.1142/S13639196110032 6X.
DOI: https://doi.org/10.1142/S136391961100326X
View in Google Scholar
Hadryś-Nowak, A. (2018). Family entrepreneurship orientation in family owned SMEs: a key resource for internationalization? Entrepreneurial Business and Economics Review, 6(2), 153?169. doi: 10.15678/EBER.2018.060208.
DOI: https://doi.org/10.15678/EBER.2018.060208
View in Google Scholar
Hollen, M., Lengfeld, C., & Konrad, E. D. (2020). Business success for creative and cultural entrepreneurs: influences of individual- and firm-related factors on revenue and satisfaction. International Journal of Arts Management, 22(2), 52?65.
View in Google Scholar
Hu, X., Ocloo, C. E., Akaba, S., & Worwui-Brown, D. (2019). Effects of business to business e-commerce adoption on competitive advantage of small and medium-sized manufacturing enterprises. Economics and Sociology, 12(1), 80?99. doi: 10.14254/2071-789X.2019/12-1/4.
DOI: https://doi.org/10.14254/2071-789X.2019/12-1/4
View in Google Scholar
Isaac, V. R., Borini, F. M., Raziq, M. M., & Benito, G. R. G. (2019). From local to global innovation: the role of subsidiaries' external relational embeddedness in an emerging market. International Business Review, 28(4), 638?646. doi: 10.10 16/j.ibusrev.2018.12.009.
DOI: https://doi.org/10.1016/j.ibusrev.2018.12.009
View in Google Scholar
Kellermanns, F. W., Eddleston, K. A., Sarathy, R., & Murphy, F. (2012). Innovativeness in family firms: a family influence perspective. Small Business Economics, 38(1), 85?101. doi: 10.1007/s11187-010-9268-5.
DOI: https://doi.org/10.1007/s11187-010-9268-5
View in Google Scholar
Kiran, R. (2017). IPR scenario and factors for promoting IPR culture: a post-TRIPS period analysis of selected pharmaceutical firms in North India. Economic Research-Ekonomska Istraživanja, 30(1), 873?891. doi: 10.1080/133167 7X.2017.1311223
DOI: https://doi.org/10.1080/1331677X.2017.1311223
View in Google Scholar
Ključnikov, A., Civelek, M., Čech, P., & Kloudová, J. (2019). Entrepreneurial orientation of SMEs? executives in the comparative perspective for Czechia and Turkey. Oeconomia Copernicana, 10(4), 773?795. doi: 10.24136/oc.2019. 035.
DOI: https://doi.org/10.24136/oc.2019.035
View in Google Scholar
Kljucnikov, A., Civelek, M., Cera, G., Mezulanik, J., Manak, R. (2020). Differences in entrepreneurial orientation (EO) of SMEs in the international context: evidence from the Czech Republic and Turkey. Inzinerine Ekonomika-Engineering Economics, 31(3), 345?357. doi: 10.5755/j01.ee.31.3.23933.
DOI: https://doi.org/10.5755/j01.ee.31.3.23933
View in Google Scholar
Kozubikova, L., Cepel, M., & Zlamalova, M. (2018). Attitude toward innovativeness based on personality traits in the SME sector. Czech Republic case study. Management & Marketing. Challenges for the Knowledge Society, 13(2), 913?928. doi: 10.2478/mmcks-2018-0013.
DOI: https://doi.org/10.2478/mmcks-2018-0013
View in Google Scholar
Lee, C. (2004). The determinants of innovation in the Malaysian manufacturing sector: an econometric analysis at the firm level. ASEAN Economic Bulletin, 21(3), 319?329.
DOI: https://doi.org/10.1355/AE21-3E
View in Google Scholar
Martínez-Román, J. A., & Romero, I. (2013). About the determinants of the degree of novelty in small businesses' product innovations. International Entrepreneurship and Management Journal, 9, 655?677. doi: 10.1007/s11365-013-02 69-0.
DOI: https://doi.org/10.1007/s11365-013-0269-0
View in Google Scholar
Putri, A. C., & Viverita, V. (2019). Risk preference of founder and descendant of Indonesian family firms. Polish Journal of Management Studies, 20(2), 414?425. doi: 10.17512/pjms.2019.20.2.35.
DOI: https://doi.org/10.17512/pjms.2019.20.2.35
View in Google Scholar
Oberg, C., Grundstrom, C., & Jonsson, P. (2011). Acquisitions and network identity change. European Journal Marketing, 45(9/10), 1470?1500. doi: 10.1108/03 090561111151853.
DOI: https://doi.org/10.1108/03090561111151853
View in Google Scholar
Tabachnick, B. G., & Fidell, L. S. (2013). Using multivariate statistics. Boston: Pearson.
View in Google Scholar
Tominc, P. (2019). Perceived innovativeness and competitiveness of early-stage entrepreneurs. Croatian Economic Survey, 21(1). doi: 10.15179/ces.21.1.3.
DOI: https://doi.org/10.15179/ces.21.1.3
View in Google Scholar
Villaluz, V. C., & Hechanova, M. R. M. (2019). Ownership and leadership in building an innovation culture. Leadership & Organization Development Journal, 40(2), 138?150. doi: 10.1108/LODJ-05-2018-0184.
DOI: https://doi.org/10.1108/LODJ-05-2018-0184
View in Google Scholar
Wach, K. (2020). A typology of small business growth modelling: a critical literature review. Entrepreneurial Business and Economics Review, 8(1), 159?184. doi: 10.15678/EBER.2020.080109.
DOI: https://doi.org/10.15678/EBER.2020.080109
View in Google Scholar
Webb, J. W., Ketchen, D. J., & Ireland, R. D. (2010). Strategic entrepreneurship within family-controlled firms: opportunities and challenges. Journal of Family Business Strategy, 1(2), 67?77. doi: 10.1016/j.jfbs.2010.04.002.
DOI: https://doi.org/10.1016/j.jfbs.2010.04.002
View in Google Scholar
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2021 Equilibrium. Quarterly Journal of Economics and Economic Policy
This work is licensed under a Creative Commons Attribution 4.0 International License.
