Product Innovation and Corporate Governance in Turbulent Times: Evidence from Italian SMEs

The paper uses longitudinal data from a sample of 142 Italian family firms to examine how a firm’s decisions of strategic relevance – like the introduction of a new product and the founder succession – are affected by short-term external factors and firm-specific factors. The empirical analysis exploits the advantages of a conditional risk set duration model, which allows taking into account the multiple ordered occurrences of similar failures (multiple product introductions and successions) during the company life. Econometric evidence shows that both product introduction and succession are delayed by a recession and that the probability for these events to occur increases as the negative effect of downturns tend to vanish, but at different rates.