Firm-level innovation by Japanese family firms: Empirical analysis using multidimensional innovation measures

Keiichi Kubota, Hitoshi Takehara

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

This study investigates whether innovation activities conducted by family firms in Japan can be distinguished from those carried out by non-family firms. For this purpose, we choose a sample of listed family firms and investigate four firm-level innovation measures, namely R&D intensity, the number of patents, the quality of patents, and innovation efficiency, over a sample period of 2003 to 2012. We find that innovation output by family firms in Japan is lower than that of non-family firms, although innovation input is higher in family firms. The innovation of Japanese family firms, overall, is inefficient compared with non-family firms. Our cross-sectional regression analysis shows that family shareholding is positively associated with the innovation measures after controlling for several of the characteristics of firms. On the contrary, founder CEOs enhance R&D investment, although their presence is detrimental to both the number of patents and their quality. Descendant CEOs tend to adopt low-input/low-output innovation strategies. In sum, the innovative activities of Japanese family firms continually change to accomplish their sustainable growth.

Original languageEnglish
Article number101030
JournalPacific Basin Finance Journal
Volume57
DOIs
Publication statusPublished - 2019 Oct

    Fingerprint

Keywords

  • Family control
  • Family ownership
  • Patent information
  • R&D expenditure

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

Cite this