Knowledge Internalization and Product Development in Family Firms: When Relational and Affective Factors Matter

Abstract

Understanding the forces that support and inhibit product development (PD) in family firms is central to explaining their long–term success and survival. Our study reveals that social capital and relational conflict among family members do not affect PD directly, as existing theory suggests, but only through the internalization of knowledge among family members. In contrast, family members’ affective commitment to the family firm is so powerful that it has both a mediated and a direct effect on PD. These results differ across generations of the controlling family, therefore offering an extension of existing theories of knowledge and PD in family firms.