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Does the paternalism of founder-managers improve firm innovation? Evidence from Chinese non-state-owned listed firms

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  • Sun, Lan
  • Liu, Shaobo
  • Chen, Peng

Abstract

This paper investigates the impact of firm founders as top managers (founder-managers) on firm innovation. We first propose a text-based indicator of founder-manager paternalism to measure the emotional relationship between founder-managers and the firms they founded from the perspective of socioemotional wealth. We further investigate the role of founder-manager paternalism in firm innovation using a sample of non-state-owned listed firms in China during the period 2007-2017. The results show that founder-manager paternalism has a positive impact on firm innovation. Moreover, the findings indicate that higher levels of corporate governance may undermine the positive relationship between founder-manager paternalism and firm innovation.

Suggested Citation

  • Sun, Lan & Liu, Shaobo & Chen, Peng, 2022. "Does the paternalism of founder-managers improve firm innovation? Evidence from Chinese non-state-owned listed firms," Finance Research Letters, Elsevier, vol. 49(C).
    • Handle: RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003695
    DOI: 10.1016/j.frl.2022.103146
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    2. Haidong Li & Ziming Qian & Shanyong Wang & Jing Wang & Qian Wang, 2023. "Do green concerns promote corporate green innovation? Evidence from Chinese stock exchange interactive platforms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1786-1801, April.

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