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Abstract

The purpose of this paper is to examine innovation in family firms. Using a sample of 1,205 cross-European family SME manufacturing firms taken from the 2011 European Commission and European Central Bank Survey on Access to Finance of SMEs (ECB SAFE), we examine how innovation dimensions integrate and relate to expectations of future growth. Particularly, we examine four capability dimensions: technology development, operations, management, and transaction capability, and find that an integration of three or more of these dimensions is optimum. Our findings are of significant interest given that we are able to control for cultural influences, age, and financing differences. Also, as the family firms included in the study are considered vitally important to the economic well-being of most communities, the managerial implications we discuss are relevant to a wide audience.

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