The role of internal social capital in organisational innovation. An empirical study of family firms

• We investigate the family firm social capital studying internal relationships.
• We demonstrate that internal social capital can enhance family firm innovation.
• Family group relationships have a positive influence on family firm innovation.
• Non-Family group relationships have a positive influence on family firm innovation.
• Although both groups are necessary for family firm innovation, there is a signal that non-family social capital might have a greater incidence on family firm innovation.

Using a sample of 172 Spanish family firms and two responders per firm, consisting of a family member and a non-family member (344 returned questionnaires), we examine the effects of internal social capital on organisational innovation. Building on the relational, cognitive, and structural view, and on social capital theory, we propose that internal networking relationships between family members (family social capital) and between non-family members (non-family social capital) in family firms facilitates innovation. Moreover, its benefits flow from the relationships among the firm's internal groups. The results of structural equation models indicate that the social capital of both family members and non-family members has a direct and positive effect on innovation. Further, our findings provide evidence that non-family social capital is just as effective as family social capital for family firm innovation, establishing a new line of research from an empirical perspective. The findings also test whether social factors are key assets of family firm innovation.