Abstract/Summary

This study examines the propensity of family firms to employ the open customer innovation model as well as the benefits from collaboration with customers between family and non-family firms. It applies the geographical and firm size perspective as two boundary conditions for innovation in family firms and discusses the mechanism enabling family firms to achieve greater returns to open customer innovation model in domestic market. In doing so we provide a much-needed comparison on “how” family firms innovate, using longitudinal data of 21,140 observations with 17,859 most innovative UK firms during 2002–2014. We find that both family and non-family firms engage with customer in open innovation, however family firms benefit more from collaboration with customers in domestic markets, with firm size moderating this relationship. Implications for owner-managers and policymakers may help create region-specific open innovation policies with greater customer involvement in innovation process.