The Impact Of Family Ties And Founder Involvement On Innovation In High-Tech Firms

Anastasia Stepanova () and Polina Khmeleva ()
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Anastasia Stepanova: National Research University Higher School of Economics
Polina Khmeleva: National Research University Higher School of Economics

HSE Working papers from National Research University Higher School of Economics

Abstract: This paper investigates the impact of family participation and founder involvement in business on innovation in high-tech companies from the S&P500 index over the period 1999–2017. We demonstrate that the family firm paradox (family firms tend to invest less in innovation while remaining more efficient in innovation output) is not so obvious for technological companies. We conclude that founder involvement and CEO ownership leads to higher R&D expenditures and income margins in the pharma and IT sectors. However, consistent with previous studies of family participation, family ownership and holding the offices of CEO and chairman, has a negative impact on amounts spent on innovation.

Keywords: Family firms; founder; risk-taking; behavioral finance; corporate governance (search for similar items in EconPapers)
JEL-codes: G30 G39 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2022
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-cse and nep-sbm
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Published in WP BRP Series: Financial Economics / FE, December 2022, pages - 31

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Persistent link: https://EconPapers.repec.org/RePEc:hig:wpaper:91/fe/2022

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