Family business, innovation and organizational slack in Taiwan

Abstract

This study examines the effect of family ownership and unabsorbed organizational slack resources on innovation in high-tech firms in Taiwan. In a sample of 278 public Taiwanese firms over a period of seven years (2002–2008) representing a total of 1946 observations, firms with higher levels of family ownership were shown to have significantly lower internal innovation in terms of RD a negative relationship between family ownership and royalty payment intensity emerged for firms with low-level unabsorbed slack. Royalty payments and purchases of technology are often associated with lower innovation in firms, and Taiwan high-tech firms with additional slack did focus more on innovation through higher R&D and lower external technology royalty payments.