Abstract

Family embeddedness is often used to explain the different innovation behaviors and entrepreneurial outcomes in family versus non-family businesses (Chrisman et al., 2015, Powell & Eddleston, 2016). While previous studies have examined established firms such as publicly listed family firms (e.g. Block, 2012) or family SMEs (e.g. Classen et al., 2014), there has been limited evidence on the start-up phase of the firm. However, family members are often an important resource for start-up firms with scarce resource and experience (Chrisman et al., 2003). Family employees are willing to accept lower wages in return for the emotional value that they derive from working in the firms of their own families (Block et al., 2015). Moreover, family employees might influence the decision and behavior of the entrepreneur, which consequently affects firm performance, by providing their social supports and relational resources to the entrepreneur. Using the family embeddedness perspective of entrepreneurship (Aldrich & Cliff, 2003), this paper investigates the relationship between the involvement of family employees and innovation behaviors (i.e. innovation input and output) of start-up firms.

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