Family ownership and cooperative R&D: the moderating effect of political ties
Journal of Knowledge Management
ISSN: 1367-3270
Article publication date: 27 September 2021
Issue publication date: 22 February 2022
Abstract
Purpose
This study aims to investigate the impact of family ownership on cooperative research and development (R&D). Drawing on the ability and willingness paradox framework in family business research, the authors suggest that family ownership influences cooperative R&D via two opposing mechanisms: power concentration and wealth concentration. It also deepens the current understanding of the boundary conditions of informal institutions for the impact of family ownership on cooperative R&D by investigating the moderating role of political ties.
Design/methodology/approach
The authors analyze a panel of 610 Chinese manufacturing family firms and 2,127 firm-year observations from 2009 to 2017. Fixed effects regression analysis is used to test the hypotheses, with the two-stage Heckman model to address sample selection bias.
Findings
The research findings indicate that family ownership has an inverted U-shaped relationship with cooperative R&D and political ties moderate the relationship in such a way that the inverted U-shaped relationship will be steeper in firms with more political ties than in firms with fewer political ties.
Practical implications
Family ownership influences firms’ cooperative R&D through the positive effect of power concentration and the negative effect of wealth concentration. Family owners should, therefore, take advantage of concentrated power, for instance, by adapting quickly and committing sufficient resources to cooperative R&D opportunities, while controlling path-dependent relationship development caused by concentrated family wealth. The effect of political ties on the relationship between family ownership and cooperative R&D is found to be a double-edged sword.
Originality/value
This study extends the ability and willingness paradox framework and provides novel insights into cooperative R&D in family businesses by integrating power concentration and wealth concentration associated with family ownership. Moreover, this study provides a contingency perspective and introduces the moderating role of political ties in shaping cooperative R&D in family firms.
Keywords
Acknowledgements
The authors thank two anonymous reviewers and Guest Editor Dr Unai Arzubiaga for their valuable and insightful comments, which helped to substantially improve the quality of this paper. Errors and oversights are of authors alone. The first two authors contributed equally to this article and Wang Xiao should be also considered the co-corresponding author (Cloud_wx@163.com).
Citation
Dong, F., Wang, X. and Chen, J. (2021), "Family ownership and cooperative R&D: the moderating effect of political ties", Journal of Knowledge Management, Vol. 26 No. 2, pp. 403-422. https://doi.org/10.1108/JKM-08-2020-0651
Publisher
:Emerald Publishing Limited
Copyright © 2021, Emerald Publishing Limited