Please use this identifier to cite or link to this item: https://doi.org/10.1080/16081625.2012.762971
Title: Founding family ownership and innovation
Authors: Chen, V.Y.S. 
Tsao, S.-M.
Chen, G.-Z.
Keywords: family firms
innovation
risk diversification
voting-cash flow right divergence
Issue Date: Dec-2013
Citation: Chen, V.Y.S., Tsao, S.-M., Chen, G.-Z. (2013-12). Founding family ownership and innovation. Asia-Pacific Journal of Accounting and Economics 20 (4) : 429-456. ScholarBank@NUS Repository. https://doi.org/10.1080/16081625.2012.762971
Abstract: This study empirically examines the extent to which family ownership affects innovation. Using a sample of Taiwanese listed firms, we find that family firms invest more in innovation than nonfamily firms, suggesting that family firms' incentives to encourage innovation investment (e.g. long-run presence concern) outweigh families' risk diversification concern in making innovation decisions. Our results are more pronounced in families that have voting-cash flow rights divergence and that operate in high-tech industries. Our study suggests that the family ownership structure is not necessarily detrimental to shareholder interests, although prior research indicates that the agency cost of large and small shareholders is high in East Asian countries where family ownership can exacerbate this type of agency conflict. © 2013 © 2013 City University of Hong Kong and National Taiwan University.
Source Title: Asia-Pacific Journal of Accounting and Economics
URI: http://scholarbank.nus.edu.sg/handle/10635/124960
ISSN: 16081625
DOI: 10.1080/16081625.2012.762971
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