Family firms and investment innovation

Economic Annals-XXI: Volume 205, Issue (9-10), Pages: 63-67

Citation information:
Wajdi, M. F., Fauziah, F., Latief, A., Said, M., & Rislawati, N. (2023). Family firms and investment innovation. Economic Annals-XXI, 205(9-10), 63-67. doi: https://doi.org/10.21003/ea.V205-08

M. Farid Wajdi
PhD (Economic),
Faculty of Economics and Business,
Universitas Muhammadiyah Surakarta
A. Yani Str., Pabelan, Tromol Pos 1 Surakarta, 57162, Indonesia
fw265@ums.ac.id
ORCID ID: https://orcid.org/0000-0003-0564-1125

Fenty Fauziah
PhD (Management),
Faculty of Economics Business and Politics,
Universitas Muhammadiyah Kalimantan Timur
15 Juanda Str., Samarinda, 75124, Indonesia
ff230@umkt.ac.id
ORCID ID: https://orcid.org/0000-0001-5086-3515

Azhar Latief
MA (Accounting),
Faculty of Economics Business and Politics,
Universitas Muhammadiyah Kalimantan Timur
15 Juanda Str., Samarinda, 75124, Indonesia
al824@umkt.ac.id
ORCID ID: https://orcid.org/0000-0002-5429-0862

Muhammad Said
MA (Management),
Faculty of Economics Business and Politics,
Universitas Muhammadiyah Kalimantan Timur
15 Juanda Str., Samarinda, 75124, Indonesia
msaid060497@gmail.com
ORCID ID: https://orcid.org/0009-0007-2865-0776

Nita Rislawati
MA (Management),
Faculty of Economics Business and Politics,
Universitas Muhammadiyah Kalimantan Timur
15 Juanda Str., Samarinda, 75124, Indonesia
rislawati53@gmail.com
ORCID ID: https://orcid.org/0009-0003-5372-3296

Family Firms and Investment Innovation

Abstract. This study, with the aim of improving the performance of small and medium-sized companies, expresses the impact of the decision-making of managers and entrepreneurs of these companies in the direction of investment innovation in today’s business conditions with wide variables and technological growth. This paper focuses on the phenomenon of innovation within family businesses, seeking to identify and analyse its role in enhancing family-owned firms. The research investigates the influence of family ownership, family management involvement, internationalization strategies, and company size on innovation within the context of family-owned manufacturing companies listed on the Indonesia Stock Exchange. Data spanning is the 2019-2021 period, collected from annual reports and announcements of these manufacturing firms, reveals that family ownership and firm size correlate with investment in innovation. However, the recruitment of family management and the implementation of family-owned business internationalization strategies appear to exert limited influence on innovation activities. Considering the importance of family companies in economic and technical progress and the complexities and changing conditions governing their business environment, this research main contribution is to show how managers and entrepreneurs make decisions in investment innovation according to the conditions of governing in family small and medium companies.

Keywords: Investment Innovation; Decision Science; Family Management Involvement; Internationalization Strategy

JEL Classifications: D1; E2; O31; P42

Acknowledgements and Funding: We express our gratitude to the Higher Education, Research, and Development Council of the Central Leadership of Muhammadiyah for providing research grants, which have been beneficial and contributed to the future body of knowledge.

Contribution: The authors contributed equally to this work.

Data Availability Statement: The dataset is available from the author upon request.

DOI: https://doi.org/10.21003/ea.V205-08

References

1. Bharathi, R. F., Devi, D. S., Gandra, P. K., Gade, S., Dhote, S., & Makhija, P. (2024). Integrating Digital Transformation And Innovation For Sustainable Entrepreneurship In Small And Medium-Sized Enterprises (Smes). Migration Letters, 21(S6), 631-639. https://migrationletters.com/index.php/ml/article/view/7977
2. Calabr`o, A., Vecchiarini, M., Gast, J., Campopiano, G., De Massis, A., & Kraus, S. (2019). Innovation in Family Firms: A Systematic Literature Review and Guidance for Future Research. International Journal of Management Reviews, 21(3), 317-355. https://doi.org/10.1111/ijmr.12192
3. Hauck, J., & Prügl, R. (2015). Innovation Activities during Intra-family Leadership Succession in Family Firms: An Empirical Study from a Socioemotional Wealth Perspective. Journal of Family Business Strategy, 6(2), 104-118. https://doi.org/10.1016/j.jfbs.2014.11.002
4. Ishenin, D., Govorkov, S., Teslenko, I., Klykov, M., Kabanov, O., Lyalin, E., Mukhamedova, Z., & Shaposhnikov, A.  (2021). An Algorithm for Computer-Aided Design of A Technological Process with Preset Manufacturability Parameters. Procedia Environmental Science, Engineering and Management, 8 (4), 733-738. http://procedia-esem.eu/pdf/issues/2021/no4/2_Ishenin_21.pdf
5. Lee, J., Kim, Ch., & Choi, G. (2019). Exploring data envelopment analysis for measuring collaborated innovation efficiency of small and medium-sized enterprises in Korea. European journal of operational research, 278(2), 533-545. https://doi.org/10.1016/j.ejor.2018.08.044
6. Liu, G., Chen, Y., & Ko, W. W. (2024). The influence of marketing exploitation and exploration on business-to-business small and medium-sized enterprises’ pioneering orientation. Industrial Marketing Management, 117, 131-147. https://doi.org/10.1016/j.indmarman.2023.12.012
7. Moen, Ø., & Servais, P. (2002). Born global or gradual global? Examining the export behavior of small and medium-sized enterprises. Journal of international marketing, 10(3), 49-72. https://doi.org/10.1509/jimk.10.3.49.19540
8. Revilla, A. J., Pérez-Luño, A., Nieto, M. J. (2016). Does Family Involvement in Management Reduce the Risk of Business Failure? The Moderating Role of Entrepreneurial Orientation. Family Business Review, 29(4), 365-379.
9. Suprihono, A. E., Raharjo, T., Handoko, S., Setiana, & Mallaleng, H. R. (2022). Transmedia effects on business, aesthetics and production of a traditional cultural product on the example of shadow puppet shows in Indonesia. Economic Annals-XXI, 199(9-10), 48-57. https://doi.org/10.21003/ea.V199-06

Received 22.04.2023
Received in revised form 22.05.2023
Accepted 6.06.2023
Available online 27.11.2023