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The Impact Of Family Ties And Founder Involvement On Innovation In High-Tech Firms

Author

Listed:
  • Anastasia N. Stepanova

    (National Research University Higher School of Economics)

  • Polina A. Khmeleva

    (National Research University Higher School of Economics)

Abstract

This paper investigates the impact of family participation and founder involvement in business on innovation in high-tech companies from the S&P500 index over the period 1999–2017. We demonstrate that the family firm paradox (family firms tend to invest less in innovation while remaining more efficient in innovation output) is not so obvious for technological companies. We conclude that founder involvement and CEO ownership leads to higher R&D expenditures and income margins in the pharma and IT sectors. However, consistent with previous studies of family participation, family ownership and holding the offices of CEO and chairman, has a negative impact on amounts spent on innovation.

Suggested Citation

  • Anastasia N. Stepanova & Polina A. Khmeleva, 2022. "The Impact Of Family Ties And Founder Involvement On Innovation In High-Tech Firms," HSE Working papers WP BRP 91/FE/2022, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:91/fe/2022
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    More about this item

    Keywords

    Family firms; founder; risk-taking; behavioral finance; corporate governance;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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