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Does the Intergenerational Succession of Family Business Promote or Inhibit Innovation? |
WANG Xiangyao,JIN Yihe,BI Yi |
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Abstract This paper divides the succession process of family business into three phases, including Involved-in Management, Co-management, and Takeover Management, then researches whether the different phases of intergenerational succession promote or inhibit innovation. This paper does an empirical study about listed family firms in A-share main market during 2012-2014 years, a total of 404 data, and finds that the intergenerational succession of family firms leads to the reduction of enterprise innovation activities. The family firms with the second generation involved-in management and co-management inhibit innovation, namely, involvement management reduces the R & D investment of funding and personnel, and co-management also decreases R & D investment of funding. The second generation takeover management may promote the technological innovation of family firms to the innovation level before the succession gradually. Therefore, the three stages of succession process could be as used as the theoretical basis of the research in the intergenerational succession of family businesses. We should be aware of the differences in the process. Family firms could not blindly protect social emotional wealth and ignore technological innovation, which will influence the sustainable development of the enterprise.
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Received: 23 September 2016
Published: 15 December 2016
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Corresponding Authors:
JIN Yihe
E-mail: jinyihe0718@163.com
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