Resolving the paradox of green innovation across generations in family firms: an exploratory analysis of incumbents and successors perceptions

Purpose

Informed by the dearth of research and insufficient knowledge of green innovation in family firms, this study explores the intersection of green innovation, family firms and intergenerational succession in resolving the paradox of green innovation across generations.

Design/methodology/approach

This exploratory qualitative study explored the perceptions of incumbents and successors of textile family firms in Italy to highlight the crucial role of firms’ entrepreneurial orientation and social-emotional wealth in shaping and fostering green innovation in family firms.

Findings

The results show that a low bureaucratic process, flexibility and communication strengthen green innovation in family firms. However, the lack of sustainable raw materials, consumer behaviour, insufficient financial capital, stakeholder engagement and risk aversion affects green innovation in family firms. While family firms are willing to engage in green innovation, the results suggest that family firms are more likely to consider green innovation with superior financial benefits rather than environmental benefits alone. According to the results, incumbents and successors differ in harnessing knowledge to increase their entrepreneurial orientation and protect firms’ social-emotional wealth.

Originality/value

Despite many barriers preventing green innovation in small family firms, this study shows that the interaction of internal capabilities, external knowledge and family (entrepreneurial) orientation contributes to green innovation and the overall performance of small family firms.

https://doi.org/10.1108/jfbm-03-2025-0068