Research On The Impact Of Second-generation Involvement On Innovation Investment In Family Businesse

As the main force of private enterprises,family enterprises have played a significant role in promoting the high-quality development of China’s economy.In recent years,with the aging of the founding generation,enterprises have to face the problem of intergenerational inheritance.Although most family businesses still choose the traditional inheritance method of inheriting the father’s business,research shows that this method may also affect the subsequent vitality and creativity of the company,and become one of the vital reasons why the family business does not last more than three generations.At present,the research on the relationship between second-generation involvement and innovative investment in family enterprises is mainly based on empirical analysis,and there is a lack of discussion on the intermediate mechanism between the two.Therefore,this paper first reviews the relationship between second-generation involvement and innovation investment,finds that social-emotional wealth may be the main breakthrough,and further divides social-emotional wealth into two dimensions: constrained and extended,and discusses the reasons and mechanisms of its differential impact on the innovation investment of family enterprises in the second-generation involvement stage.Subsequently,this paper takes Sunward Intelligent and Sany Heavy Industry as comparative cases to explore the heterogeneous changes of innovation investment under different social-emotional wealth choices of the two companies.It is found that Sunward Intelligent has become the main reference point for decision-making at this stage due to insufficient willingness to succeed and neglect of the establishment of stakeholder relationships,as well as the emphasis on the continuous control of family over enterprises.Under the dominant logic of constrained social-emotional wealth,Sunward Intelligent has a conservative business strategy,and tends to single debt financing,unwilling to introduce external capital and human resources,so that enterprises lack sufficient R&D funds and R&D personnel,thereby inhibiting the innovation investment of enterprises.Different from Sunward Intelligence,the Sany Heavy Industry family not only actively dilutes the control in the second-generation involvement stage,but also has a strong willingness to succeed the second generation and relatively mature authority and legitimacy,so the extended social emotional wealth has become the main reference point for Sany Heavy Industry’s decision-making at this stage.Under the guidance of extended social-emotional wealth,enterprises began to focus on long-term development,on the one hand,actively introducing external investment to provide financial support for enterprise innovation;On the other hand,it pays attention to equity incentives,stimulates employees’ enthusiasm for innovation,and provides enterprises with rich R&D talents.This greatly increases Sany Heavy Industry’s innovation investment at this stage.This paper reveals the heterogeneous influence of different dimensions of social-emotional wealth on the innovative investment of family firms,and the research conclusions are of great significance for integrating the disputes between social-emotional wealth and the innovative investment behavior of family firms.In practice,the research conclusions of this paper are also conducive to providing reference for the decision-making of family business managers.