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The impact of family firm intergenerational succession on innovation Bubbles

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  • Yu, Songyang

Abstract

Using data on Chinese A-share listed family firms from 2007 to 2024, this study examines the impact of intergenerational succession on corporate innovation bubbles. We construct an innovation bubble indicator based on patent structural imbalance to capture firms’ tendency toward “quantity over quality” in innovation. The results show that intergenerational succession significantly reduces innovation bubbles. Mechanism analysis indicates that this effect operates through lower agency costs: the continuity of family control alleviates owner–manager conflicts and restrains short-term, strategic, and low-quality innovation, thereby guiding resources toward higher-quality R&D. Heterogeneity analysis further demonstrates that the effect is stronger in the eastern and western regions and in nonhigh-tech industries. This study provides new evidence on the governance role of family succession in mitigating innovation bubbles in China.

Suggested Citation

  • Yu, Songyang, 2026. "The impact of family firm intergenerational succession on innovation Bubbles," Finance Research Letters, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:finlet:v:92:y:2026:i:c:s154461232600108x
    DOI: 10.1016/j.frl.2026.109577
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    Keywords

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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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