How do non-family CEOs influence family firm innovation performance?

Abstract

PurposeWhile the relationship between non-family CEOs and corporate innovation in China has been widely studied, the results remain inconclusive. This study explores the relationship between non-family CEOs and corporate innovation in the context of intergenerational succession. It considers the background and background characteristics of non-family CEOs in an attempt to provide a theoretical foundation for human resource management and innovative strategic management that can be applied in the transformation of family companies.Design/methodology/approachThe authors develop, then test, a series of hypotheses using an econometric analysis of a large sample of Chinese listed family firms. To control for endogeneity problems, such as missing variables in the model and the selectivity bias of the sample, propensity score matching (PSM) model is applied to analyze the panel data of 452 listed family firms from 2009–2019.FindingsThis study first validates the mechanism by which non-family CEO background characteristics affect innovation performance in family firms. It then reveals the varying moderating effects of two stages of intergenerational succession (i.e. later-generation participation in management and later-generation take-over management) that influence the relationship between non-family CEOs and corporate innovation.Originality/valueThe study's findings based on upper echelon and imprinting theory complement and extend existing research by revealing the impact of non-family CEOs from different backgrounds, and also identifying the role of intergenerational succession in the relationship between non-family CEO background characteristics and innovation performance.