Abstract
We present a theory of family ownership as a driver of the heterogeneity (between-firm differences) and variability (within-firm differences over time) of absorptive capacity (AC). Building on our analysis of the multiple dimensions of family owner influence on firm behavior and the mechanisms that can shape the firm willingness and ability to acquire and exploit external knowledge, we introduce the concepts of motivation and implementation gaps to explain why, paradoxically, family ownership can cause both upward and downward divergences in AC. Our contingency framework identifies conditions under which the positive and negative effects of family ownership on AC are likely to prevail and adds a temporal perspective suggesting cyclical patterns in AC marked by duration of family ownership and ownership succession.