The role of founder reign in explaining family firms' R&D investment : evidence from China
Purpose: Based on the socioemotional wealth theory, this study aims to empirically investigate how founder reign, that is a founder serving as a cheif executive officer (CEO) or chairman, influences family firms' research and development (R&D) investment in emerging economies (e.g. China). Design/methodology/approach: This study empirically tested the hypotheses based on a sample of listed Chinese family companies from 2008 to 2018. Findings: Founder reign has a negative impact on family firms' R&D investment. Particularly, the negative impact of the founder serving as chairman on family firms' R&D investment is larger than the negative impact of the founder serving as CEO on family firms' R&D investment. Founder's military experience weakens the negative impact of founder reign on family firms' R&D investment, but founder's executive master of business administration (E)MBA experience has no moderating effect on this relationship. Originality/value: First, the authors contribute to the family firm innovation literature by providing an alternative but complementary explanation of why family firms have relatively low R&D investment levels. This research shows that founder reign is a key reason for family firms in China eschewing R&D investment. Second, by incorporating the founder serving as CEO and the founder serving as chairman into the analytical framework, and then examining their impact on family firms' R&D investment, our research helps us to fully understand the impact of founder reign on firm strategic actions. Third, we contribute to the “founder reign-firm strategic actions” framework by revealing how founders' human capital profoundly affects the relationship between founder reign and family firms' R&D investment.
Year of publication: |
2021
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Authors: | Zhong, Xi ; Song, Tiebo ; Ren, Liuyang |
Published in: |
European Journal of Innovation Management. - Emerald, ISSN 1460-1060, ZDB-ID 2028189-4. - 2021 (10.09.)
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Publisher: |
Emerald |
Saved in:
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