Family Firms And Regional Innovation Activity: Evidence From The German Mittelstand
Family firms are important not only for a region but for the economy as a whole. In particular, the long-term orientation and the local embeddedness of family firms suggest a positive effect on regional innovation activity. Yet, despite the widely acknowledged importance of family firms for the economy, little research exists on this issue. This paper analyses the effect of family firms on regional innovation. Using a dataset of 326 German regions, the regressions show that regions with a higher share of family firms also show higher levels of innovation activity, as measured by the number of successful patent applications. The implications of these findings for policy and research are discussed.