Family business, innovation and organizational slack in Taiwan

Yunshi Liu (), Yi-Jung Chen () and Linda C. Wang ()
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Yunshi Liu: National Yunlin University of Science and Technology
Yi-Jung Chen: National Kaohsiung University of Applied Sciences
Linda C. Wang: City University of Hong Kong

Asia Pacific Journal of Management, 2017, vol. 34, issue 1, No 9, 193-213

Abstract: Abstract This study examines the effect of family ownership and unabsorbed organizational slack resources on innovation in high-tech firms in Taiwan. In a sample of 278 public Taiwanese firms over a period of seven years (2002–2008) representing a total of 1946 observations, firms with higher levels of family ownership were shown to have significantly lower internal innovation in terms of R&D investment as has been shown in a number of previous studies. Yet the research also identified a key moderating factor. Unabsorbed organizational slack moderated the relationship between family ownership and innovation. Specifically, when firms had high levels of unabsorbed slack, the relationship between family ownership and R&D intensity changed to positive. In addition, the Taiwan data showed an additional moderating relationship of organizational slack; a negative relationship between family ownership and royalty payment intensity emerged for firms with low-level unabsorbed slack. Royalty payments and purchases of technology are often associated with lower innovation in firms, and Taiwan high-tech firms with additional slack did focus more on innovation through higher R&D and lower external technology royalty payments.

Keywords: Family business; Innovation; R&D; Intellectual property; Patents; Royalty payments; Organization slack; Taiwan (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (29)

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DOI: 10.1007/s10490-016-9496-6

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