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A Far-Reaching Parental Love? Co-Governance of Intergenerational Succession and Innovation Activities in Chinese Family Firms

A Far-Reaching Parental Love? Co-Governance of Intergenerational Succession and Innovation... ABSTRACT Motivated by the research gap on intergenerational succession dynamics of family firms, this study examines the effects of initiating intergenerational succession on firms' innovation activities. We propose that initiation of intra-family succession can result in founder–successor co-governance that represents a strategic transition to the succession and incorporates the two conflicting yet complementary directions of change and continuity. Grounded in the theory of altruism, we suggest that co-governance will positively affect firms' innovation activities and that this positive link is contingent on the idiosyncratic intra-family relationships of kinship type, age difference, and gender difference between the founder and the successor. Furthermore, we posit that co-governance will lead to a flow of resources to low risk, rather than more inventive but higher risk, innovations. Based on the unbalanced panel data of 4,694 firm-year observations in our sample from listed Chinese family firms during the 2006–2015 period, empirical analysis supports our hypotheses and confirms that when examining family firms' innovation, there is a need to take the heterogeneity of the intra-family governance structure more fully into consideration. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Management and Organization Review Cambridge University Press

A Far-Reaching Parental Love? Co-Governance of Intergenerational Succession and Innovation Activities in Chinese Family Firms

Management and Organization Review , Volume 18 (2): 37 – Apr 1, 2022

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Publisher
Cambridge University Press
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press on behalf of The International Association for Chinese Management Research
ISSN
1740-8784
eISSN
1740-8776
DOI
10.1017/mor.2021.45
Publisher site
See Article on Publisher Site

Abstract

ABSTRACT Motivated by the research gap on intergenerational succession dynamics of family firms, this study examines the effects of initiating intergenerational succession on firms' innovation activities. We propose that initiation of intra-family succession can result in founder–successor co-governance that represents a strategic transition to the succession and incorporates the two conflicting yet complementary directions of change and continuity. Grounded in the theory of altruism, we suggest that co-governance will positively affect firms' innovation activities and that this positive link is contingent on the idiosyncratic intra-family relationships of kinship type, age difference, and gender difference between the founder and the successor. Furthermore, we posit that co-governance will lead to a flow of resources to low risk, rather than more inventive but higher risk, innovations. Based on the unbalanced panel data of 4,694 firm-year observations in our sample from listed Chinese family firms during the 2006–2015 period, empirical analysis supports our hypotheses and confirms that when examining family firms' innovation, there is a need to take the heterogeneity of the intra-family governance structure more fully into consideration.

Journal

Management and Organization ReviewCambridge University Press

Published: Apr 1, 2022

Keywords: altruism; co-governance; innovation; intergenerational succession; 关键词:共同治理; 利他主义; 代际传承; 创新; 家族企业

References