Abstract
Beside resource-based differences and industry-based differences, organizational behavior is influenced by the institutional context wherein firms are embedded. Although formal institutions have been addressed as a main driver of firms’ innovation activities, research has led to controversial findings. Beside the codified set of rules and standards, a range of less formalized shared meanings is likely to affect the extent to which organizations conduct R&D activities. Therefore, taking an institution-based perspective on firm-level strategic decision making, we examine under which informal institutional conditions (namely family and culture) firms rely on the strength of formal IPR institutions in their R&D decisions. By testing our hypotheses on a representative sample of privately-held European manufacturing businesses, we find that, family involvement in the business plays an “institutional void filling” role, only in presence of a congruent collectivist culture in firms environment. Our study offers contributions to institutional theory, innovation research and family business literature.