The efficacy of market sensing and family-controlled board in the new product development performance of family firms in emerging market

A call has recently been made for scholarly research aimed at understanding how family-owned firms can enhance their performance. Only a handful of studies have hitherto examined the capabilities of such firms in relation to innovation-related outcomes. In addition to this gap, past studies have examined either the mediation or moderation model, which has not fully elucidated the essence of how these firms can improve their new product development performance. By addressing these critical gaps by using survey data collected from 253 family-owned small-medium enterprises (SMEs) based in the UAE, we found that market sensing capabilities mediate the influence of socio-emotional wealth on new product performance. Such mediated influence has also been found to be positively moderated when a firm’s board is controlled by family members. Our conceptual model is underpinned by the dynamic capability and upper echelons theoretical perspectives. Our findings offer useful insights for both practice and theory.