[topknot]

Also check out Gordon and Bennett book pg. 185 - talks about ears -

"should be small "V" shaped ears."

See second pearagraph - "should not be round at the tips, nor bat-shaped like a French Bull-dog's. They are carried erect, and when excited or at attention, carried even higher. Although this is not covered in the Yorkie Standard the ears should have quite thin leather (outer cartilage of the ear), although with enough strength to keep them erect. Thick leather leads to semi-erect or drop ears.
The size of the ear should receive a good deal of appreciative regard.
The ancestors who went into the prduction of the Yorkshire Terrier all had large ears and they are dominant genetically to small ears.
... no breeder should ever forget that the ears do add up in the total of a prosperous look to the head."

So yes, it can be genectic.