Barriers to innovation and patenting. Evidence from European family and non-family firms

Purpose: The article aims to measure the effect of innovation obstacles on the probability of patenting by using an integrative framework that considers a variety of financial and non-financial obstacles and emphasizes the role of firm ownership in moderating the effect of obstacles on innovation. Design/methodology/approach: The empirical analysis exploits a sample of 6,772 European manufacturing firms from the period 2007–2011, integrating data from the EFIGE survey with the Orbis Intellectual Property (Orbis IP) dataset from Bureau van Dijk. In terms of methodology, we carry out the analysis by applying a logistic regression with standard errors clustered at country level. Findings: Results indicate that financial and non-financial obstacles negatively impact innovation. We also find that family firms have a lower probability of applying for a patent compared to non-family firms. Moreover, when considering the effect of each obstacle, the evidence varies depending on the firm’s ownership. The negative effect is more pronounced for non-FFs regarding market and regulation obstacles and organizational rigidities. However, it is weakly significant for lack of qualified personnel and information on technology. The perception of economic risks and the lack of suitable financial resources consistently impact businesses, regardless of ownership. Originality/value: We contribute to the existing literature in a twofold way. First, by considering firm patenting activity as an innovation profile, we provide new insights into the obstacles that hinder the patent process, while previous research instead focused on product and process innovation or broader innovation activities. Second, we evaluate whether the influence of innovation obstacles is dependent upon the firm’s ownership structure. No previous research has provided evidence on this issue.