The influence of successor's implicit power and explicit power on dual innovation---The mediating effect of board dissent.

Abstract

This study explores the influence of the power of family business successors on firm innovation under the theory of social embeddedness. Based on the 2000-2019 unbalanced panel data of listed Chinese family enterprises, this study empirically examines the differences in the influence of the implicit and explicit power of successors on incremental and radical innovation respectively. Our findings show that explicit power has a more positive impact on incremental innovation, while implicit power is more conducive to promoting radical innovation. In addition, the study finds that the reason why the explicit power of succession does not have a significant impact on radical innovation, that is, the reason why board dissent is not related to radical innovation, is that some of the major innovation decisions in the enterprise are not all made at formal meetings. The research conclusions not only extend the theoretical application of social embeddedness in family enterprises, but also provide certain practical guidance for promoting enterprise innovation.