Innovation capabilities as drivers of transgenerational longevity in family firms: evidence from an emerging economy

Abstract

This study examines the role of innovation capabilities in driving transgenerational longevity in family firms. While prior research has produced mixed findings regarding whether family firms are innovation-constrained or innovation-enabled, limited attention has been given to how innovation operates as a capability that supports long-term continuity across generations. Drawing on the resource-based view and dynamic capabilities perspective, this study conceptualizes innovation capabilities as path-dependent, socially embedded resources that enable family firms to balance the tension between preservation and renewal. Using survey data from 241 family-owned firms in Uganda, the study employs partial least squares structural equation modeling to test the proposed relationships. The findings reveal that both process and product innovation capabilities are positively and significantly associated with transgenerational longevity, with process innovation exhibiting a slightly stronger effect. Building on these results, the study advances a capability-based framework of transgenerational longevity, introducing the concept of adaptive continuity to explain how family firms sustain performance while preserving core identity across generations. The study contributes to the family business literature by reframing innovation as a transgenerational capability, integrating resource-based and family business perspectives, and providing empirical evidence from an underresearched emerging economy context.