Why are some family firms not innovative?: Innovation Barriers and Path Dependence in Family Firms

•A lack of clear leadership reduces family firm orientation towards innovation.•Reputation negatively affects family firm innovation.•The persistence of a standardized view generated by the founder over time can reduce family firm innovation.•Emotional conflicts between relatives negatively affect family firm innovation. Although scholars have recognized the importance of innovation in family firms, the literature on family firm innovation tends to generally depict family firms as either ‘good’ or ‘bad’ for innovation, or focus on the factors with the potential to positively stimulate family firm innovation. Drawing on path dependence theory, this study focuses specifically on what family-specific barriers work against innovation in family firms. To that end, we follow a qualitative theory-building approach due to the limited amount of extant theory, and study a sample of four family businesses headquartered in Spain and Uruguay. The related propositions and theoretical contributions emerging from our study are shared in the concluding section.