1. FAMILY FIRM HETEROGENEITY AND PATENTING.
REVISING THE ROLE OF SIZE AND AGE
FRANCESCO AIELLO, LIDIA MANNARINO, VALERIA PUPO
DIPARTIMENTO DI ECONOMIA, STATISTICA E FINANZA «GIOVANNI ANANIA» UNIVERSITÀ DELLA
CALABRIA, ARCAVACATA DI RENDE (COSENZA)
Small Bus Econ (2023).
https://doi.org/10.1007/s11187-023-00805-y
Accepted 08 July 2023 – Published 31 July 2023
AISRE, XLIV CONFERENZA SCIENTIFICA ANNUALE, 2023 - Naples 6-8 Sept 2023

2. CONCEPTUAL MODEL AND HYPOTHESES
Family ownership
firms
Innovative
performance
H1 (-)
Size
H2
(+)
Age
H3
(+, -)
H4
(+, -)

3. CONCEPTUAL MODEL AND HYPOTHESES
Family ownership
firms
Innovative
performance
H1 (-)
Size
H2
(+)
Age
H3
(+, -)
H4
(+, -)

4. DATA AND SAMPLE DESCRIPTION
• Data from the Orbis Europe database of Bureau van Dijk, which comprised an initial
panel of about 26,000 firms that applied for at least one patent with the EPO
between 1981 and 2017
• Patents are from the Orbis Intellectual Property which was linked to PATSTAT released
by the European Patent Office (EPO).
• Orbis IP makes available a unique firm identifier that allows matching between firm-
level patents and balance sheet data contained in Bureau van Dijk’s Orbis Europe
• The sample is composed of 22,541 observations from about 3,500 Italian companies
observed from 2010 to 2017.

5. The distribution of the sample of firms
Whole sample Family firms Nonfamily firms
N. % N. % N. %
Observations 22,541 100% 10,419 46.22% 12,122 53.78%
Firm size
Micro (≤ €2 m) 2,487 11.03% 1,997 19.17% 490 4.04%
Small (≤ €10 m) 7,649 33.93% 4,985 47.85% 2,664 21.98%
Medium (≤ €50 m) 8,381 37.18% 3,034 29.12% 5,347 44.11%
Large (> €50) 4,024 17.85% 403 3.87% 3,621 29.87%
Firm age
≤ 30 years 13,587 60.28% 6,194 59.45% 7,393 60.99%
>30 8,954 39.72% 4,225 40.55% 4,729 39.01%
Sectors
High Tech 1,955 8.67% 604 5.80% 1,351 11.15%
Medium high tech 11,170 49.55% 4,855 46.60% 6,315 52.10%
Medium-low tech 6,373 28.27% 3,417 32.80% 2,956 24.39%
Low tech 3,043 13.50% 1,543 14.81% 1,500 12.37%
Territorial area
Northeast 9,020 40.02% 4,094 39.29% 4,926 40.64%
Northwest 10,076 44.70% 4,518 43.36% 5,558 45.85%
Center 2,664 11.82% 1,390 13.34% 1,274 10.51%
South 781 3.46% 417 4.00% 364 3.00%

6. RESULTS
NEGATIVE BINOMIAL MODEL
COUNT MODEL/INTENSIVE MARGIN
THE BASIC MODEL
Family firms -0.738***
(0.057)
Stock of patents 0.066***
(0.003)
Debt ratio -0.008
(0.114)
Medium-low -0.13
(0.091)
Medium-high
Tech
0.234***
(0.078)
High Tech 0.323***
(0.098)
Regional
dummies
Yes
Year dummies Yes

7. Panel A
Negative binomial model
(1) (2) (3) (4) (5) (6)
Family firms -0.738*** -0.152** 0.118 -0.547** -1.085***
-2.024***
(0.057) (0.063) (0.132) (0.277) (0.31) (0.432)
Stock of patents 0.066*** 0.044*** 0.043*** 0.044*** 0.041*** 0.041***
(0.003) (0.002) (0.002) (0.002) (0.002) (0.002)
Debt ratio -0.008 -0.255** -0.263** -0.258** -0.291*** -0.291***
(0.114) (0.114) (0.114) (0.113) (0.112) (0.111)
Medium-low Tech -0.13 -0.055 -0.047 -0.056 -0.028 -0.01
(0.091) (0.092) (0.092) (0.092) (0.091) (0.091)
Medium-high Tech 0.234*** 0.238*** 0.252*** 0.230*** 0.252*** 0.270***
(0.078) (0.079) (0.079) (0.079) (0.078) (0.078)
High Tech 0.323*** 0.300*** 0.310*** 0.290*** 0.296*** 0.323***
(0.098) (0.100) (0.100) (0.099) (0.099) (0.099)
Regional dummies Yes Yes Yes Yes Yes Yes
Year dummies Yes Yes Yes Yes Yes Yes
Age -0.101*** -0.092*** -0.114*** -0.418***
-0.523***
(0.034) (0.035) (0.037) (0.094) (0.100)
Size 0.312*** 0.332*** 0.309*** 0.129**
0.061
(0.016) (0.018) (0.016) (0.060) (0.064)
Family Firms*Size -0.099** -0.169***
0.307*
(.042) (.046) (.168)
Family firms*Age 0.114 0.429***
0.736***
(0.081) (0.102) (0.146)
Size*Age 0.071***
0.094***
(0.019) (0.021)
Family
firms*Size*Age
-0.146***
Patent equations: results from a zero-inflated model

8. Negative binomial model (AMEs)
Family firms -5.429*** -0.224** -0.530*** -0.235*** -0.615*** -0.611***
(2.165) (0.099) (0.165) (0.099) (0.166) (0.164)
Age -0.159*** -0.132** -0.160*** 0.082 0.120
(0.065) (0.058) (0.068) (0.077) (0.084)
Size 0.489*** 0.461*** 0.483*** 0.481*** 0.477***
(0.100) (0.089) (0.098) (0.095) (0.091)

9. Factor effect of firm ownership moderated by size

10. Factor effect of firm ownership moderated by age

11. SIZE AND AGE ACT AS MODERATORS
SIZE EFFECT AGE EFFECT

12. At Age=
At Size= 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.
-1 -1.4492* -1.0082* -0.5673* -0.126 0.315 0.7556* 1.1966* 1.6
0 -1.2881* -0.9200* -0.5518* -0.184 0.185 0.5527* 0.9209* 1.2
1 -1.1270* -0.8317* -0.5363* -0.2409* 0.054 0.3499* 0.6452* 0.9
2 -0.9659* -0.7434* -0.5208* -0.2982* -0.076 0.147 0.3696* 0.5
3 -0.8049* -0.6551* -0.5053* -0.3555* -0.2057* -0.056 0.094
4 -0.644 -0.5668* -0.4898* -0.4128* -0.3358* -0.2588* -0.182 -
5 -0.483 -0.478 -0.474 -0.4701* -0.4658* -0.4616* -0.4574* -0
6 -0.322 -0.390 -0.459 -0.5273* -0.5959* -0.6645* -0.7331* -0
7 -0.161 -0.302 -0.443 -0.585 -0.7260* -0.8674* -1.0088* -1
8 0.001 -0.214 -0.428 -0.642 -0.8561* -1.0703* -1.2844* -1
9 0.162 -0.125 -0.412 -0.699 -0.9862* -1.2731* -1.5601* -1
10 0.323 -0.037 -0.397 -0.756 -1.1163* -1.4760* -1.8358* -2
Family ownership effect on the intensive margin of patenting at different values of age and size

13. FAMILY OWNERSHIP EFFECT ON THE INTENSIVE MARGIN
OF PATENTING MODERATED BY THE INTERACTION OF
AGE AND SIZE

14. DISCUSSION AND SOME CONCLUSIONS
• This study investigates the relationship
between FFs and innovation through the lens
of SEW by adopting a context-based
approach. In this respect, size, and age are
seen as key contingent factors that can
explain the variability in firm behavior
• We take advantage of prior research that
shows size affects the availability of
resources and that age is associated with
experience and the generational stage of a
firm
• Departing from an assessment of the
individual roles of size and age, our
findings indicate that these 2 factors exert
a joint effect on patenting.
• We help to identify the conditions under
which FFs are likely to outperform or
underperform non-FFs
• By employing a proper research design to
reflect FF heterogeneity we provide
conclusions that complement, rather than
contradict, prior studies of family business

15. DISCUSSIONE AND SOME CONCLUSIONS
• Being family-owned can be either detrimental or beneficial to
patenting.
• Although we find a baseline negative effect on innovative
performance for FFs, the results support the view that SEW
constitutes a double-edged sword in FFs, depending on
whether its positive or negative aspects prevail.
• We find that firm size and age help to determine which aspect
(i.e., positive or negative) of SEW dominates for different FFs.

16. SMALL AND YOUNG FF FIRMS PATENT LESS THAN NON-
FFS. THE GAP DECREASES WITH SIZE AND AGE WITHIN
FIRST-GENERATION FIRMS.
• FFs benefits more from an age-related learning process because
these businesses usually begin with a weak set of competencies
and an inexperienced founder. Skills grow over time as founders
acquire market knowledge, improve their ability to adapt, and
reshape strategy choices as the external environment changes
(Cucculelli et al., 2014).
• Additionally, owing to the high level of social capital available to
them, FFs gain more from knowledge flows than non-FFs (Arregle
et al., 2007). Building social capital takes time; therefore, the
relationship between FFs, and patents is expected to vary with
firm age.

17. • 1. As any business grows, its processes become more complex and new skills are needed. FFs avoid recruiting from outside the
family circle; therefore, nepotism limits the range of human capital available to them and innovation activities can suffer due to
their inadequate expertise (Bertrand and Schoar, 2006; Gomez-Mejia et al., 2001; Pérez-González, 2006). FFs have major financial
constraints due to their considerable reluctance to use external resources (Serrasqueiro et al., 2016) in order to retain ownership
control in the family (e.g., Gómez-Mejía et al., 2007). stage can affect post-founder companies (Gersik, 1997). The family’s
emotional attachment to the firm and its desire to preserveInnovation activities are costly and therefore unattractive for FFs with
limited financial resources.
• 2 Problems related to an FF’s generational ownership will likely decline in the post-founder generation. Moreover, any
negative effects that emerge among family members can be more damaging than when a respected powerful founder remains
in charge, and it is possible (even likely) that some family members will continue to identify and be involved with the firm more
than others, which can create conflicts that can compromise the viability of the business (Le Breton-Miller and Miller, 2013).
Moreover, if the firm is very large, passing control to succeeding generations often results in a dispersed ownership structure
(Van Aken et al., 2017). A principal-principal problem can arise due to conflicts between the members of different nuclear
families within an FF. This phenomenon is known as family opportunism: family members make decisions based on their own
nuclear household's welfare rather than the welfare of the extended family (Le Breton-Miller et al., 2011; Lubatkin et al., 2005;
Miller et al., 2013). Furthermore, family conflicts in later generations can restrict the FF’s learning capacity by impeding
knowledge integration (Chirico and Salvato, 2008), thereby affecting innovation performance. Thus, as the size of an FF increases,
innovation activities are expected to decline compared to non-FFs. This is not expected in larger non-FFs (Werner et al., 2018).
THE INNOVATION GAP PERSISTS AND INCREASES FOR LARGE AND POST-
FOUNDER GENERATION ENTERPRISES
EXPLANATIONS ARE TWOFOLD

18. DO RESULTS HOLD FOR GREEN PATENTS?
WHAT NEXT?
NO,THEY DON’T

19. A DIFFERENT STORY FOR GREEN TECHNOLOGY?
PATENTS, WHATEVER THE
TECHNOLOGY
GREEN PATENTS

20. THANK YOU FOR YOUR ATTENTION
Aiello, F., Mannarino, L. & Pupo, V. Family firm heterogeneity and
patenting. Revising the role of size and age. Small Bus Econ (2023).
https://doi.org/10.1007/s11187-023-00805-y