Patents, trade secrets and performance aspirations in family firms

Katrin Hussinger and Issah Wunnam
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Issah Wunnam: University of Leicester, UK

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: We investigate whether family ownership is associated with a preference for patents or trade secrets. Using a sample of S&P 500 firms, we show that family ownership is negatively associated with patenting and positively associated with the usage of trade secrets. We further show that both relationships are moderated by firm performance below the aspiration level, i.e. the performance benchmark level that an organization sets. These results can be explained with a mixed gambles behavioral agency framework. When family firms perform below their aspiration level, prospective financial gains become relatively more important as compared to current socio emotional wealth so that patents become more and trade secrets less attractive.

Keywords: Family firms; patents; trade secrets; mixed gambles; aspiration gap. (search for similar items in EconPapers)
JEL-codes: G32 M14 O32 O34 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-ipr, nep-sbm and nep-tid
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Journal Article: Patents, trade secrets and performance aspirations in family firms (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:25-11

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