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Innovation of Family-Owned Enterprises and Government Subsidies: From A Policy-Oriented Perspective

Author

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  • Kai Zhao

    (School of Economics, Qingdao University, Qingdao 266071, China)

  • Wanshu Wu

    (College of Architecture and Urban Planning, Qingdao University of Technology, Qingdao 266033, China)

Abstract

This paper investigates the influence effects of government subsidies on the innovation of family-owned enterprises in China through a panel data model and Heckman two-stage model, and explores the possible influence mechanisms of government subsidies on different innovation behaviors of family-owned enterprises through a mediation analysis method. It is found that government subsidies play a significant role in promoting innovation input, innovation quantity and innovation quality of family-owned enterprises. From the perspective of innovation quality, government subsidies are more beneficial to family-owned enterprises without “two jobs in one” or “2nd generation succession”. Compared with family-owned enterprises that have completed intergenerational inheritance, government subsidies are more conducive to enhancing the innovation quantity of family-owned enterprises that have not achieved “2nd generation succession”. We find also that government subsidies can indirectly improve the innovation quality of family-owned enterprises by increasing the proportion of state-owned shares and easing the financing constraints. By organically integrating two relatively independent research fields (effectiveness of government subsidy and innovation of family businesses), this paper opens up a new way of thinking for exploring the sustainability of family businesses.

Suggested Citation

  • Kai Zhao & Wanshu Wu, 2022. "Innovation of Family-Owned Enterprises and Government Subsidies: From A Policy-Oriented Perspective," Sustainability, MDPI, vol. 14(20), pages 1-18, October.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:20:p:13331-:d:944360
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    References listed on IDEAS

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    Cited by:

    1. Bo Yao & Fangbin Qiao, 2023. "The Heterogeneous Effects of Central and Local Subsidies on Firms’ Innovation," Sustainability, MDPI, vol. 15(2), pages 1-15, January.
    2. Huasheng Zhu & Ruobin Liu & Bo Chen, 2023. "The Rise of Specialized and Innovative Little Giant Enterprises under China’s ‘Dual Circulation’ Development Pattern: An Analysis of Spatial Patterns and Determinants," Land, MDPI, vol. 12(1), pages 1-26, January.

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