Family firms, sustainable innovation and financing cost: Evidence from Chinese hi-tech small and medium-sized enterprises

摘要

Using a large sample of hi-tech Chinese small and medium-size enterprises (SMEs), we examine whether family-owned businesses (FBs) can display more efficient use of innovation resources than non-FBs. We find that though family firms invest less in innovation input i.e. R&D expenditure, they outperform the non-FBs in terms of innovation output i.e. sales of new products or technology. We also find that the higher conversion rate of innovation input into output is closely related to financial constraints on innovation. The results suggest that the interaction between family ownership and financing cost has a significant negative effect on innovation, measured by R&D intensity and innovative sales. In addition, knowledge derived from competitors, universities and industry associations can effectively enhance innovative sales.