How does familiness drive knowledge accumulation in family firms? PLS-SEM and NCA insights on the role of family essence

Abstract

This study explores how familiness – comprising family involvement (power and intergenerational experience) and family essence – shapes knowledge accumulation in family firms. Using the dynamic capabilities framework, it distinguishes between internal and external knowledge to examine how structural and cultural dimensions of familiness interact with organizational learning. Special emphasis is placed on family essence as a potential moderator or necessary condition. The research addresses gaps in the literature by highlighting the interplay of relational and structural resources, particularly in emerging markets where family firms must navigate both tradition and innovation to remain competitive. Data were collected from 142 unlisted family firms in Chile. Partial least squares structural equation modeling (PLS-SEM) was used to assess the influence of family involvement and family essence on internal and external knowledge accumulation. To complement the SEM findings, necessary condition analysis (NCA) was conducted using the CR-FDH method, based on latent variable scores exported from SmartPLS and processed in RStudio. This dual-method approach enabled the identification of both sufficient and necessary conditions for knowledge accumulation, providing a more comprehensive understanding of the conditions under which familiness enables learning processes in family firms. Intergenerational experience enhances internal knowledge accumulation by fostering tacit knowledge sharing across generations. Family essence significantly influences both internal and external learning, serving as a cultural mechanism that promotes trust, cohesion and absorptive capacity. Although family power does not directly affect external learning, its positive impact emerges when combined with strong family essence. NCA confirms that family essence is a necessary condition for both forms of knowledge accumulation. These findings show that familiness is not inherently effective; its impact depends on the relational context and internal alignment of resources, positioning it as a dynamic and contingent driver of learning. First, it is a cross-sectional study, which makes it difficult to observe dynamic phenomena such as familiness. This limitation restricts the ability to capture the temporal evolution of intergenerational learning mechanisms. Second, the study employed a questionnaire-based method, which – though commonly used – is subject to common method bias. Third, from a methodological perspective, we acknowledge that our model does not explicitly address potential endogeneity concerns. Although this risk may not substantially affect our findings, we recognize that cross-sectional designs like the present one are exposed to biases such as reverse causality or omitted variables. This study provides family business managers with useful insights into how to manage their family-based resources – the interplay of resources – to foster more effective knowledge accumulation. In particular, managers need to understand that knowledge accumulation is closely related to the specific family resources engaged in the business. This understanding will help them cultivate a collaborative environment for knowledge exchange, especially tacit knowledge, derived from both family and non-family members. Managers should foster a climate of trust and commitment that facilitates interaction between family members and organizational staff, offering the necessary incentives to encourage knowledge creation, transfer and articulation within the family firm. This study offers a novel relational view of familiness by integrating structural (power, experience) and cultural (essence) dimensions within a dynamic capabilities framework. It advances theory by identifying family essence as both a relational enabler and a necessary condition for knowledge accumulation. Methodologically, the combination of PLS-SEM and NCA provides new insights into the sufficiency and necessity of family firm resources – an underexplored area in family business research. Contextually, the focus on Chilean firms extends theoretical applications to Latin American markets, demonstrating how family cohesion can convert structural resources into dynamic capabilities in non-Western settings.