Abstract. Family firms are generally small and medium-sized, characterized by ‘flat’ organizational structures and internal succession patterns and relying upon self-financing. One way to overcome inherent liability of family business is to innovate in critical management aspects and jump out to a new operational model. The capability of a firm to continuously innovate is critical for competitive advantage. It can also contribute to the development for the so-called dynamic capability. A firm’s dynamic capability describes to continuously innovate.Keywords. Household behavior, Family economics, Family business.JEL. D10, D13, D14
