Exploring intellectual capital in family firms. An empirical investigation

We investigate the influence of family ownership and family involvement in the management on the firm’s intellectual capital (IC). The resource-based theory of the firm predicts both benefits and disadvantages of the family on the firm’s IC. Using Pulic’s VAIC as a proxy for the IC of the company, we test two sets of competing hypotheses through multivariate regressions of panel data from Italian listed companies. The results show that family firms have a significantly higher average VAIC than non-family firms. We find a non-linear association between family involvement in the management and IC. At lower levels, the family involvement has a positive association with IC. At higher levels, when the benefits of the family interaction with the business are overcompensated by the disadvantages, the relationship reverses and becomes negative. The research can contribute to both the academic literature on intellectual capital and to family business studies.