Exploring the role of psychological ownership toward organizational innovation in family businesses

Purpose The purpose of this study is to understand the link between psychological ownership and organizational innovation in family businesses. The research also explored the mediating effect of knowledge transfer alongside the moderating role of governance practices. Design/methodology/approach A total of 116 family businesses across India took part in the study. Data were collected with the help of a structured questionnaire supplied to the seniormost family member of each firm. The data were analyzed by using the moderated mediation model analysis in R. Findings The findings indicate that psychological ownership is a key driver of organizational innovation in family businesses. The transfer of knowledge mediates the relationship between psychological ownership and organizational innovation. Moreover, governance practices of the businesses moderate the association between psychological ownership and knowledge transfer, and its downstream consequences on organizational innovation. Originality/value While previous research has explored various aspects of nurturing innovation, the present study explores the effect of psychological ownership in the context of family businesses in India. This study also gives insights into how knowledge transfer and governance practices work together to influence innovation in these businesses.