Do State Ownership Imprints Affect Innovation in Family Firms? The Estimation and Inference of a Panel Model with a Time Trend

Tao Ye, Vincenzo Liu () and Xiao Guo
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Tao Ye: School of Business, Macau University of Science and Technology, O952, 1 Avenida Wai Long, Taipa 999078, Macau
Vincenzo Liu: School of Business, Macau University of Science and Technology, O952, 1 Avenida Wai Long, Taipa 999078, Macau
Xiao Guo: Sino-French Institute, Renmin University of China, Beijing 100872, China

Mathematics, 2023, vol. 11, issue 17, 1-19

Abstract: In the realm of China’s bustling economy, a fascinating dynamic exists between family businesses and state-owned enterprises, characterized by a symbiotic relationship and collaboration. Many family firms today originate from state-owned enterprises. Hence, their earlier ownership institution can influence privatized family firms. However, the impact of this privatization on long-term strategic orientation is not clear. This study endeavors to shed light on this complex matter through meticulous examination, employing estimation and inference techniques through the use of a panel model with a discernible time trend. Combining both imprinting theory and institutional logic theory, this study finds that state ownership imprints intervene in the strategic outcomes of family firms: Privatized family firms induce a lower level of innovation as compared to non-privatized family firms. This research also finds that intergenerational succession weakens this effect while the proportion of state-owned shares strengthens it. Robustness tests, utilizing the PSM method, have been conducted to validate the credibility and reliability of the findings obtained through this study. The findings of this research serve as a testament to the ever-evolving dynamics and interconnectedness prevalent within the intricate tapestry of China’s economic landscape.

Keywords: privatized family business; state ownership imprint; firm innovation; intergenerational succession (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2023
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