The Impact Of Family Involvement On Corporate Innovation Ability

Family enterprise in China nowadays plays a decisive role in the national economy, making significant contributions, such as creating considerable wealth and providing with a large amounts of jobs, it becomes the main management mode of the Chinese private enterprises. However, given the reason of fiercer global competition and deeper market oriented transformation, Chinese private enterprises are now faced with great challenge on transforming and upgrading. The only way lies out is improving the innovation ability of the enterprises and opening a sustainable development relying on innovation. Besides, family involvement is a key point to distinguish family business from non-family business, and it plays a descisive role on whether the family system can coordinate with business system to generate unique competitive advantages. Therefore, the relationship between family involvement and innovation ability of the enterprises has been a heated topic in recent years.In this paper, based on the core concept of family involvement and the 90 listed family firms from the year 2010 to 2014, chosen R&D intensity as the main index to measure an enterprise’s ability of innovate, and chosen firm ownership, management, decision-making and atruism as family involvement dimensions, to discusses the dimensions and depth of family involvement and then explores their influence on innovation ability with the empirically research.Firstly,on the basis of the definition of related concepts, this paper puts forward six research hypothesis and theoretical model combined with the relevant literature and the basic theories in the field of family business, such as principal-agent theory, stewardship theory, altruism theory and resource-based view. Besides, determine the selection of the sample and the measurement of the variables, and then collect the relevant disclosure data and information of the listed family firms annual reports, the prospectus and the listing announcement through the Website of Tai’an database, Tide of information, Hexun, Sina Finance. Compared with the previous research, most of them ignore the non-economic target-altruism. In this paper, the replaced index of the horizontal and vertical variable in biology used to measure the altruistic behavior among family members and extend the dimensions of family involvement.Secondlly, software SAS 9.2 is applied to regress the original modle to test for Multi-collinearity, and then regress other modles one by one, in order to adjust to the optimal model, we take the method of the Autocorrelation test, Heteroscedasticity test, as well as the robust analysis, to test the reliability of the model.Thirdly, considering the Feasible region, we got some conclusion as below:(1) firm ownership, decision making, and the horizontal variable of atruism have a reversed "U" shape relationship with innovation ability; (2) management and the vertical variable of atruism have an inhibitory action on innovation ability; (3) the corporate’s scale and nature have a regulatory effect on innovation ability. At last, based on the above, some suggestions about family involvement are raised to promote family enterprise innovation ability.