Work

Inherited challenges: How second-generation involvement hinders green innovation in family firms

Year: 2025

Type: article

Abstract: ABSTRACT Drawing on a sample of Chinese family firms covering 10182 firm-years from 2007 to 2019, we examine the impact of second-generation involvement (succession) on green innovation in family firms. Our findings suggest that second-generation succession adversely affects green innovation. Mechanism analyses demonstrate that second-generation involvement reduces green innovation by restricting access to bank loans, reducing government subsidies, and lowering corporate risk-taking. Cross-sectional analyses show that the detrimental effect of succession on green innovation is amplified when a successor attains a lower level of education or possesses a weaker background in research and development. Furthermore, the adverse impact is more pronounced in firms with lower institutional ownership or state shareholding. Overall, we provide substantial evidence that second-generation succession in family firms is one specific factor, among many, that adversely impacts firms’ green innovation. Finally, we discuss policy implications for these findings.

Source: International Review of Economics & Finance

DOI: 10.1016/j.iref.2025.104475

Authors: Baohua Liu, Qilin Wang, Samuel Chang, Yongliang Zeng

Institutions: Sichuan University, Hunan University, University of Chicago

Language: English

Topic: Family Business Performance and Succession

Subfield: Organizational Behavior and Human Resource Management

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: gold

Estimated APC paid: $1,930

Funders: Sichuan Office of Philosophy and Social Science, National Natural Science Foundation of China, Natural Science Foundation of Hunan Province, National Social Science Fund Youth Project