Spousal co-governance and innovation investment in family firms: Evidence from China

The ownership structure of family firms can influence corporate governance and long-term strategic decision-making through marital relationships. This study examines the impact of spousal co-governance on innovation investment in family firms using a sample of family-controlled listed companies in the Shanghai and Shenzhen A-share markets from 2011 to 2023. The empirical results reveal that spousal co-governance significantly increases innovation investment in family firms, and endogeneity and robustness tests support this conclusion. Mechanism tests demonstrate that spousal co-governance affects family firms' innovation investment through two channels: by lowering agency costs and by strengthening the firm's sustainable innovation capability. Further analysis indicates that this effect is moderated by marital, institutional, industry, and demographic factors: it is weakened by higher regional divorce rates, stronger intellectual property protection, and more intense industry competition, and strengthened by a larger number of children and an older regional population, while firm size and high-tech status play more nuanced roles. The findings of this study provide empirical evidence and policy implications for family firms seeking to enhance competitive advantage, optimize ownership structure allocation, and protect investor interests.