Succession,Successor Social Capital And Innovation Input In Family Firms

Succession is a situation that family firms will inevitably encounter.It has a crucial impact on the performance and development of family firms,and even directly determines the survival of them.At the same time,family firms cannot maintain their longevity and break the curse saying “from clogs to clogs is only three generations” without technological innovation.Only through continuous innovation can firms keep up with the trend of the times,maintain and enhance their competitive advantages,and survive from the fierce market competition.At present,family firms in China,which are a vital part of economy and a primary force for innovation,are facing the challenge of succession.How to maintain the innovation level during the process of succession is a problem throwing to family firms.Based on socioemotional wealth theory and agency theory,this paper discusses the impact on innovation by two types of succession: intergeneration succession and the introduction of professional managers(PMs),and distinguished the source of PMs.Combining with social capital theory and upper echelons theory,this paper also researches the moderating effect of the successor's social capital and oversea experiences.Through the empirical analysis of listed A-share manufacturing family firms from 2014 to 2018,this paper concludes that:(1)Both second-generation family members(SGs)and inside PMs have a negative effect on innovation input,but the latter is smaller,while outside PMs cannot significantly improve the level of innovation.(2)Both political social capital and market social capital positively moderate the relationship between SGs and innovation,and the former has more powerful effect.(3)Political social capital has positive moderating effect on the relationship between outside PMs and innovation,while market social capital has negative moderating effect on the relationship between inside PMs and innovation.(4)Oversea experiences positively moderate the effect on innovation which SGs bring.According to the results above,this paper suggests that family firms can maintain and improve innovation level during succession by cultivating SGs in various ways,paying attention to the intergenerational transfer of social capital and properly introducing appropriate PMs and establishing effective incentive mechanism.