Sustaining family-owned furniture businesses in Indonesia: the strategic role of social capital and family involvement

Family businesses play a crucial role in economic development and operate across diverse industries, including the furniture sector. However, ensuring the longevity remains challenging, as only around 30% of family businesses successfully into the second generation and ∼12% into the third. Despite this concern, empirical research on Corporate Sustainable Longevity (CSL) remains limited, particularly within family business contexts. Furniture industry contributes 1.43% to the Indonesian GDP and is dominated by family business, which comprise nearly 80% of total companies. This study develops and empirically tests a CSL model in the Indonesian family business furniture industry by examining the roles of social capital, family involvement, and innovation capability. Using a quantitative approach, data were collected from 103 family businesses in furniture industry and analysed using Partial Least Squares Structural Equation Modelling. The results indicate that social capital and family involvement significantly enhance CSL, both directly and indirectly through innovation capability. This study contributes to the family business and longevity literature by extending the understanding of CSL in emerging economies, while also providing practical insights for family business in furniture industry to strengthen innovation capability through effective utilization of social capital and strategic family involvement to achieve long-term sustainability and competitiveness.