Industrial Policy,Excess Control Right And Firms' R&D Investment

A lot of evidences suggest that during the economic transition and the large downward pressure period in China, family firms have made great contributions to the economy development of our country, and it has been widely Accredited by all sectors of society. But the Family firms have also exposed many problems in the process of rapid development. The theory circle has pay more and more attentions to the studies about the heterogeneity?the ownership Structure?the allocation of Control right?the Investment and Financing Decisions of the Family firms. But research conclusions have some big differences.Moreover, many scholars believed that R&D activities have some important impacts on the promotion of the value and the development of enterprises, so the literatures about the internal corporate governance impact on R&D decisions have become more and more than before. But scholars drew some different conclusions about researches of the R&D expenditure of family firms. Some people believed that family ownership can significantly reduce R&D investment intensity. But someone took a different view that the higher the family ownership, the higher the R&D investment, and some scholars deemed that the relationship is inverted-U shaped between the above two. And with similar of ownership scholars also held three different perspectives about the relationship between family control rights and R&D investment: positive, negative and inverted-U shaped. there is also researchers found that the family separation of ownership and control rights has negative impact on the R&D investment. However, From the current situation of R&D investment, the family firms pay not enough attention to the R&D activities, and the overall level of family firms is lower than other types of enterprises.In this paper, based on previous studies and literature, we trimmed, summarized the scholars findings about family firms?excess control right?the family status of R&D investment?industrial policy ect issues, and on this basis I extend the excess control right from the shareholders level to the Board level, and I research the relationship between the total familial excess control right(FEC) and the R&D investment, moreover I add in the industrial policy to research the influences of industrial policies. This article analyzes and discuses this issues from two perspectives: family social emotional wealthy and control right rent-seeking behavior. My study found that(1) familial excess control right reduced R&D investment intensity. The main reasons for this phenomenon is that the family to obtain private benefits lack of motivation of R&D investment; family rent-seeking behavior tunneled enterprise interests, leading to lack of enterprise funds; family to maintain its detached control status without willing to do R&D investment activities.(2) industrial policy support can relax the impact of family excess control right on R&D investment. The Main reason is that the industrial policy can improve enterprises financing interests; enterprises will increase transparency and reduce rent-seeking behavior and the behavior of private income; it will also increase enterprises survival and competitive pressures. Next, I draw conclusions of this paper: Family Excess Control right and Corporate R&D investment had a significant negative relationship, and rent-seeking concept is dominant in family control right structure. It is same with Chen deqiu(2013) findings. while the industrial policy support can alleviate negative influences of the excess control rights. Finally, according to the findings, the study put forward corresponding practical advice, and states briefly the limitation in the study, and presents some future research questions.