Family Involvement and Firm Technological Innovation

Min Yijie, Chen Zhijun, Li Rong

Foreign Economics & Management Vol. 38, Issue 03, pp. 86 - 98,112 (2016)  DOI:10.16538/j.cnki.fem.2016.03.007

Abstract

This paper establishes a three-dimension interaction model to study the relationship between family involvement and firm technological innovation input, and further focus on the two-dimension interaction effect of governance context complexity and the three-dimension interaction effect of performance hazard.It comes to the following conclusions:firstly, the increase in family involvement leads to the reduction in technological innovation intensity in family firms; secondly, as the complexity of governance subjects increases, the negative effect of family involvement on firm technological innovation input deepens; thirdly, as firm business hazard deepens, the negative moderating role of the complexity of governance subjects further deepens.These conclusions above-mentioned go against the expectation of behavioral agency theory, showing that governance context complexity may serve as an applicable boundary of behavioral agency theory.In other words, behavioral agency theory is inappropriate to explain risk-taking behavior in family firms in complex governance context.

Keywords

behavioral agency theory; family involvement; technological innovation input; governance context complexity; performance hazard