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The Impact of Family Ownership, Management, and Governance on Innovation
Author(s) -
Matzler Kurt,
Veider Viktoria,
Hautz Julia,
Stadler Christian
Publication year - 2015
Publication title -
journal of product innovation management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.646
H-Index - 144
eISSN - 1540-5885
pISSN - 0737-6782
DOI - 10.1111/jpim.12202
Subject(s) - corporate governance , business , neglect , homogeneous , agency (philosophy) , principal–agent problem , industrial organization , set (abstract data type) , finance , medicine , philosophy , physics , nursing , epistemology , computer science , thermodynamics , programming language
Previous research suggests that the distinctive nature of family firms, including both specific advantages and disadvantages related to their particular agency situation, influences innovation activities. Most studies, however, view family firms as homogeneous entities and thus neglect the heterogeneity of family firms when comparing them with nonfamily firms. One important factor of this firm heterogeneity is family influence in terms of ownership, management, and governance. A data set of large G erman publicly traded firms between 2000 and 2009 is used to test how these three dimensions of family influence predict innovation input and output. The results show that family participation in management and governance has a negative impact on innovation input and a positive influence on innovation output. This suggests that family members are risk averse and reluctant to invest in innovation, but at the same time do so more effectively.