Innovation Capability Of Family Firms And Its Impact On Corporate Performance

China’s family enterprises have been developed from scratch for only a few decades.Along with the spring breeze of national reform,family enterprises have been able to flourish and have become a major component of the private economy by now.But now the international situation is unstable,the global economic downturn,coupled with the sudden impact of the epidemic,the survival of private enterprises encountered a difficult challenge,as the backbone of private enterprises,family enterprises can safely survive the crisis,maintain prosperity and development to a large extent affect the direction of the national economy.The survival and development of family enterprises is closely related to the level of their innovation ability.Since the 18 th Party Congress,the country has been implementing the strategy of "innovation for development",and family firms are trying their best to improve the innovation ability which would be benefical to promote high-quality and efficient development.In this context,how to ensure that the innovation capability can contribute more strongly to the growth of corporation achievement has become an issue of great concern to shareholders and management.In this thesis,we evaluate the innovation capability and corporate performance of family companies,reveal the intrinsic relationship between innovation capability and corporate performance,and finally draw inspirations for the actual situation.In this thesis,BYD Company is selected as a family business case study.Under the management of Wang Chuanfu’s family,BYD is playing a greate part in the industy and is a famous Chinese independent manufacturing brand.This thesis evaluates and studies BYD’s innovation capability,corporate performance and its influential relationship through literature research method and case study method,based on principal-agent theory,stewardship theory and social emotional wealth theory.In the thesis,the evaluation of innovation capability is divided into three aspects: innovation input capability,talent innovation capability,and intellectual property capability,and two aspects are selected in the performance evaluation:profitability and development capability.In the above five aspects were selected several indicators for the vertical comparison of historical data,as well as horizontal comparison with the average data of the same industry,non-family companies data,to arrive at a fair and comprehensive evaluation of BYD’s innovation capacity and company performance,through the evaluation results to analyze the impact mechanism of innovation ability on company performance,found that BYD’s comprehensive innovation ability is strong,its innovation ability in the early stage did not play a role in driving performance growth,but through the lag period will improve the company’s performance level.Finally,three insights are drawn from the above findings: rational allocation of input funds regarding R&D to improve capital utilization;to improve the R&D efficiency of R&D personnel and shorten the lag period;and to improve the efficiency of innovation output into income.