IDEAS home Printed from https://ideas.repec.org/a/spr/intemj/v19y2023i1d10.1007_s11365-022-00816-3.html
   My bibliography  Save this article

Family management, family succession, and R&D investment: An empirical study

Author

Listed:
  • Mengna Xu

    (Hangzhou Normal University)

  • Minglin Wang

    (Hangzhou Normal University)

  • Yiyang Han

    (Johns Hopkins University)

Abstract

Using data from the statements issued by A-share family firms listed on Chinese stock markets between 2008 and 2019, this paper explores the impacts of family management and family succession on R&D investment. We draw on the perspective of restricted and extended socioemotional wealth and differentiate exploitative R&D and explorative R&D in a detailed study. The study finds that the proportion of family members among board members or senior executives and the kinship of the CEO or chair of the board of directors have different effects on R&D investment, indicating that a diversity exists in how family members identify their role within the company. Furthermore, the participation of the controller’s children in the enterprise can promote explorative R&D investment instead of exploitative R&D, but only during the process of intergenerational succession. The findings differ from prior research in calling attention to the facts that the impact of family management is not always homogeneous owing to the dispersion of family members into different positions, and it can be misleading to conclude that R&D investment is more conservative in family businesses without considering the structure of R&D investment.

Suggested Citation

  • Mengna Xu & Minglin Wang & Yiyang Han, 2023. "Family management, family succession, and R&D investment: An empirical study," International Entrepreneurship and Management Journal, Springer, vol. 19(1), pages 293-319, March.
    • Handle: RePEc:spr:intemj:v:19:y:2023:i:1:d:10.1007_s11365-022-00816-3
    DOI: 10.1007/s11365-022-00816-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11365-022-00816-3
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11365-022-00816-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gustavo Manso, 2011. "Motivating Innovation," Journal of Finance, American Finance Association, vol. 66(5), pages 1823-1860, October.
    2. Porfírio, José António & Felício, José Augusto & Carrilho, Tiago, 2020. "Family business succession: Analysis of the drivers of success based on entrepreneurship theory," Journal of Business Research, Elsevier, vol. 115(C), pages 250-257.
    3. Villalonga, Belen & Amit, Raphael, 2006. "How do family ownership, control and management affect firm value?," Journal of Financial Economics, Elsevier, vol. 80(2), pages 385-417, May.
    4. Lucía Garcés-Galdeano & Martín Larraza-Kintana & Carmen García-Olaverri & Marianna Makri, 2016. "Entrepreneurial orientation in family firms: the moderating role of technological intensity and performance," International Entrepreneurship and Management Journal, Springer, vol. 12(1), pages 27-45, March.
    5. Choi, Young Rok & Zahra, Shaker A. & Yoshikawa, Toru & Han, Bong H., 2015. "Family ownership and R&D investment: The role of growth opportunities and business group membership," Journal of Business Research, Elsevier, vol. 68(5), pages 1053-1061.
    6. Jie Yang & Jieqiong Ma & Hongxin Zhao & Jim Cater & Mark Arnold, 2019. "Family involvement, environmental turbulence, and R&D investment: evidence from Listed Chinese SMEs," Small Business Economics, Springer, vol. 53(4), pages 1017-1032, December.
    7. Myriam Cano-Rubio & Guadalupe Fuentes-Lombardo & Valeriano Sanchez-Famoso, 2021. "Family involvement as influencer on family firm’s growth [L’influence de l’implication familière sur la croissance patronale]," Journal of International Entrepreneurship, Springer, vol. 19(4), pages 510-537, December.
    8. Beladi, Hamid & Deng, Jie & Hu, May, 2021. "Cash flow uncertainty, financial constraints and R&D investment," International Review of Financial Analysis, Elsevier, vol. 76(C).
    9. Orlando Llanos-Contreras & Jose Arias & Carlos Maquieira, 2021. "Risk taking behavior in Chilean listed family firms: a socioemotional wealth approach," International Entrepreneurship and Management Journal, Springer, vol. 17(1), pages 165-184, March.
    10. Xuan Tian & Tracy Yue Wang, 2014. "Tolerance for Failure and Corporate Innovation," The Review of Financial Studies, Society for Financial Studies, vol. 27(1), pages 211-255, January.
    11. Patricio Duran & Nadine Kammerlander & Marc van Essen & Thomas Zellweger, 2016. "Doing More with Less : Innovation Input and Output in Family Firms," Post-Print hal-02312103, HAL.
    12. Del Bosco, Barbara & Cristina Bettinelli, 2020. "How Do Family SMEs Control Their Investments Abroad? The Role of Distance and Family Control," Management International Review, Springer, vol. 60(1), pages 1-35, February.
    13. Rafael La Porta & Florencio Lopez‐De‐Silanes & Andrei Shleifer, 1999. "Corporate Ownership Around the World," Journal of Finance, American Finance Association, vol. 54(2), pages 471-517, April.
    14. Patricio Duran & Nadine Kammerlander & Marc van Essen & Thomas Zellweger, 2016. "Doing More with Less : Innovation Input and Output in Family Firms," Post-Print hal-02276703, HAL.
    15. A. Ashwin & Rishikesha Krishnan & Rejie George, 2015. "Family firms in India: family involvement, innovation and agency and stewardship behaviors," Asia Pacific Journal of Management, Springer, vol. 32(4), pages 869-900, December.
    16. Gregorio Sánchez-Marín & Antonio J. Carrasco-Hernández & Ignacio Danvila-del-Valle, 2020. "Effects of family involvement on the monitoring of CEO compensation," International Entrepreneurship and Management Journal, Springer, vol. 16(4), pages 1347-1366, December.
    17. Danny Miller & Isabelle Le Breton‐Miller & Richard H. Lester, 2011. "Family and Lone Founder Ownership and Strategic Behaviour: Social Context, Identity, and Institutional Logics," Journal of Management Studies, Wiley Blackwell, vol. 48(1), pages 1-25, January.
    18. Shigeru Asaba, 2013. "Patient investment of family firms in the Japanese electric machinery industry," Asia Pacific Journal of Management, Springer, vol. 30(3), pages 697-715, September.
    19. Claessens, Stijn & Djankov, Simeon & Lang, Larry H. P., 2000. "The separation of ownership and control in East Asian Corporations," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 81-112.
    20. Schierstedt, Bennet & Henn, Marisa & Lutz, Eva, 2020. "Diversified acquisitions in family firms: Restricted vs. extended family priorities," Journal of Family Business Strategy, Elsevier, vol. 11(2).
    21. Henrich R. Greve, 2007. "‘Exploration and exploitation in product innovation’," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 16(5), pages 945-975, October.
    22. Frank T. Rothaermel & Maria Tereza Alexandre, 2009. "Ambidexterity in Technology Sourcing: The Moderating Role of Absorptive Capacity," Organization Science, INFORMS, vol. 20(4), pages 759-780, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Minglin Wang & Mengna Xu & Qiuqin He, 2022. "The impacts of family involvement on R&D investment intensity in firms: Evidence from China," International Entrepreneurship and Management Journal, Springer, vol. 18(1), pages 277-294, March.
    2. Jiang, Fuxiu & Shi, Wei & Zheng, Xiaojia, 2020. "Board chairs and R&D investment: Evidence from Chinese family-controlled firms," Journal of Business Research, Elsevier, vol. 112(C), pages 109-118.
    3. Hanqing “Chevy” Fang & Kulraj Singh & Taewoo Kim & Laura Marler & James J. Chrisman, 2022. "Family business research in Asia: review and future directions," Asia Pacific Journal of Management, Springer, vol. 39(4), pages 1215-1256, December.
    4. Ya-Fang Wang & Yen-Fang Kuo, 2020. "Exploring the Family Effect on Innovative Capacity and Earnings Management," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 13(2), pages 39-61, September.
    5. Hansen, Christopher & Block, Joern, 2020. "Exploring the relation between family involvement and firms’ financial performance: A replication and extension meta-analysis," Journal of Business Venturing Insights, Elsevier, vol. 13(C).
    6. Christopher Hansen & Joern Block & Matthias Neuenkirch, 2020. "Family Firm Performance Over The Business Cycle: A Meta‐Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 34(3), pages 476-511, July.
    7. Min, Byung-seong, 2021. "Heterogeneity of R&D in family firms," Journal of Business Research, Elsevier, vol. 129(C), pages 88-95.
    8. Wang, Zhonghui “Hugo” & Randolph, Robert & Su, Emma & Memili, Esra, 2023. "How does the founding family matter in corporate governance? A study of the entrenchment heterogeneity among S&P 1,500 firms," Journal of Business Research, Elsevier, vol. 154(C).
    9. Taewoo Kim & Jennifer C. Sexton & Laura E. Marler, 2023. "Innovation as a mixed gamble in family firms: the moderating effect of inter-organizational cooperation," Small Business Economics, Springer, vol. 60(4), pages 1389-1408, April.
    10. Sadeen Ghafoor & Weidong Huo & Man Wang & Yunjiang Geng & Muhammad Zulfiqar & Muhammad Usman Yousaf, 2024. "Unique types and innovation input of family firm CEOs: moderating role of managerial ability in Chinese listed firms," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-14, December.
    11. Lin, Hsing-Er & Yu, Andy & Stambaugh, Jeff & Tsao, Chiung-Wen & Wang, Rebecca Jen-Hui & Hsu, I-Chieh, 2023. "Family CEO duality and research and development intensity in public family enterprises: Temporality as a model boundary," Journal of Business Research, Elsevier, vol. 158(C).
    12. María del Pilar Casado-Belmonte & María de las Mercedes Capobianco-Uriarte & Rubén Martínez-Alonso & María J. Martínez-Romero, 2021. "Delineating the Path of Family Firm Innovation: Mapping the Scientific Structure," Review of Managerial Science, Springer, vol. 15(8), pages 2455-2499, November.
    13. Wen-Ting Lin & Linda C. Wang, 2021. "Family firms, R&D, and internationalization: the stewardship and socio-emotional wealth perspectives," Asia Pacific Journal of Management, Springer, vol. 38(1), pages 91-119, March.
    14. Jin-hui Luo & Xue Li & Linda C. Wang & Yue Liu, 2021. "Owner type, pyramidal structure and R&D Investment in China’s family firms," Asia Pacific Journal of Management, Springer, vol. 38(3), pages 1085-1111, September.
    15. Francesco Chirico & Giuseppe Criaco & Massimo Baù & Lucia Naldi & Luis R. Gomez-Mejia & Josip Kotlar, 2020. "To patent or not to patent: That is the question. Intellectual property protection in family firms," Entrepreneurship Theory and Practice, , vol. 44(2), pages 339-367, March.
    16. Christophe J. Godlewski & Hong Nhung Le, 2024. "Family ties and firm performance empirical evidence from East Asia," Post-Print hal-04435944, HAL.
    17. Guedes, Maria João & Patel, Pankaj C. & Kowalkowski, Christian & Oghazi, Pejvak, 2022. "Family business, servitization, and performance: Evidence from Portugal," Technological Forecasting and Social Change, Elsevier, vol. 185(C).
    18. Barontini, Roberto & Bozzi, Stefano, 2018. "Family firm heterogeneity and CEO compensation in Continental Europe," Journal of Economics and Business, Elsevier, vol. 97(C), pages 1-18.
    19. Suveera Gill & Parmjit Kaur, 2015. "Family Involvement in Business and Financial Performance: A Panel Data Analysis," Vikalpa: The Journal for Decision Makers, , vol. 40(4), pages 395-420, December.
    20. Sondos G. Abdelgawad & Shaker A. Zahra, 2020. "Family Firms’ Religious Identity and Strategic Renewal," Journal of Business Ethics, Springer, vol. 163(4), pages 775-787, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:intemj:v:19:y:2023:i:1:d:10.1007_s11365-022-00816-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.