Are the business strategies of Korean family firms innovation-oriented?

Purpose This study investigates the relationship between the business strategies of Korean family firms and firm growth opportunities and corporate value. Design/methodology/approach This study is based on a quantitative research design and draws on organizational theory and Miles and Snow’s (1978, 2003) business strategy typology. The sample includes family firms listed on the Korean Securities Dealers Automated Quotations (KOSDAQ) from 2011 to 2019. The results are analyzed using multivariate analysis. Findings The results show that Korean family businesses with more innovative prospector business strategies tend to have stronger management capacity to capitalize on their growth opportunities and enhance their market value. Research limitations/implications The findings challenge the common perception that family ownership is inherently less innovative and more focused on defensive strategies driven by private profit extraction through family control. The findings bridge the gap between the predictions of the family control perspective and agency theory, and support the findings of Gerulaitiene et al. (2024) that having more family members involved in the business leads to better innovation outcomes. Originality/value Approximately 70% of Korean firms are family-founded and tend to be more hierarchical and patriarchal as compared to their counterparts in the US and Europe. These unique features provide an ideal setting to better understand strategic behaviors of Korean family firms and to test the study hypotheses.