Abstract/Summary

Family firms’ innovation collaboration activities are characterized by the so-called ability-willingness paradox, i.e. they are less willing to engage in collaborations, but more able to benefit from it. In this paper, we introduce collaboration partner type and geographic proximity as two important boundary conditions of this paradox. We examine the differences in knowledge collaboration for innovation across different geographical proximities and partner types for a small family and non-family firms. We use a large sample of 6,272 small firms in the United Kingdom (UK) during 2002-2016 to show that this paradox is indeed not a universal phenomenon. Small family firms overcome their lower willingness when collaborating with customers within regional proximity and are able to generate an innovation output premium as compared to small non-family firms.