A Study On The Impact Of Second Generation Succession Ascendancy On Family Business Innovation In The Context Of Intergenerational Inheritance

Family businesses play a vital role in China’s economic development,and innovation is the key for family businesses to maintain their foundation and contribute to the continuous power of China’s economic development.At present,family enterprises have entered the peak period of intergenerational inheritance,with the first generation of the family gradually withdrawing from the enterprise and the second generation starting to take the stage to become the new generation of leaders of family enterprises.So,along with the power transfer process of intergenerational succession,what kind of innovative performance will the second generation of the family have after taking over the position? Most of the existing studies consider the succession of the second generation as a single event and explore the impact of the succession of the second generation on the innovation of family firms,ignoring the fact that the succession of the second generation is a dynamic and long-term process in which the founding generation may still hold the actual control of the firm,which may have an impact on the innovation of the firm.Therefore,based on the change of the actual control of family enterprises between the parent generation and the second generation after the succession of the second generation,this paper divides the succession of the second generation into two stages: the parent generation’s "leaving without resting" and the second generation’s autonomy,and explores the innovation performance of the second generation in the parent generation’s "leaving without resting" and the second generation’s autonomy stages respectively.We will explore the innovative performance of the second generation in the stage of the father’s generation and the second generation’s autonomy respectively,in order to provide reference for the development of family enterprises.Based on the governance structure of family firms,this paper uses the social-emotional wealth theory unique to family firms as the theoretical basis for the study,and takes listed family firms in China as the research sample to explore the relationship between second-generation succession to the top and innovation investment in family firms.This study takes the samples of China’s listed family enterprises during 2011-2021 as observations,and further screens out the samples where intergenerational inheritance has occurred according to the research needs,and finally this study obtains a valid sample of 2556.The empirical study found that: the second generation’s "leaving without resting" after taking over the position inhibits the innovation investment of family firms.At the same time,redundant resources have a differential effect on the innovation input of the second generation of family firms after they take over."The more abundant the unabsorbed redundant resources are,the lower the level of innovation input of the parent generation is;the more abundant the unabsorbed redundant resources are,the lower the level of innovation input of the parent generation is.The more redundant resources are absorbed,the lower the level of innovation input of the parent generation is.The richer the absorbed redundant resources are,the higher the level of innovation input of the second generation autonomy.Overall,the empirical results of this study show that there are stage differences in the innovation behavior of the second generation after they take over the position.After the second generation takes over the position,the parent generation still holds the control of the company and "leaves but does not rest",and the two stages of autonomy with the second generation do have a differential impact on the innovation of the company.This study has both theoretical and practical significance: theoretically,this paper further delineates the study of second-generation succession ascendancy,enriches the study of family firms on intergenerational inheritance and innovation,as well as social-emotional wealth theory,and helps to improve the framework system of combining intergenerational inheritance and innovation research.In a practical sense,this paper provides a reference for the long-term development of family businesses and promotes the longevity of the business through the study of second-generation succession to the top and family business innovation.