Family firms and research and development investment: the moderator effect of the board composition

From the perspective of agency and socio-emotional theories, the family firm's innovation behavior differs from non-family companies. We investigate the relationship be-tween the family element and Research and Development (R&D) investment, and how the moderating effect of the board composi...

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Veröffentlicht in:European journal of family business 2023, Vol.13 (1), p.71-91
Hauptverfasser: Briano Turrent, Guadalupe del Carmen, Reyes Bastidas, Carolina, Watkins Fassler, Karen, Rodríguez Ariza, Lázaro
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Sprache:eng
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Zusammenfassung:From the perspective of agency and socio-emotional theories, the family firm's innovation behavior differs from non-family companies. We investigate the relationship be-tween the family element and Research and Development (R&D) investment, and how the moderating effect of the board composition affects this relationship. Using a panel data composed by 1,284 observations-year during the period 2004-2014 from Argentina, Brazil, Chile and Mexico, empirical results show that family firms increase R&D investment when the moderating effect of the board composition is included. For instance, larger boards, the independence of the board, the COB-CEO duality and female directors motivates to a higher R&D and capital expenditures. These results confirm that board composition constitutes a monitoring mechanism of family members' actions, which leads to an increase of innovation strategies and suggest that family firms promote a long-term orientation with the purpose of preserving the wealth for next generations. This research contributes to the international literature analyzing a region not explored before and characterized by a weak institutional framework and lower rates on R&D investment compared to other emerging countries.
ISSN:2444-877X
2444-8788
2444-8788
DOI:10.24310/ejfbejfb.v13i1.16065