Journal of Guizhou University of Finance and Economics ›› 2020 ›› Issue (05): 64-72.

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Mechanism of impact of social capital on family firm innovation with the moderation of family involvement

WAN Li-shuang   

  1. Beijing Jiaotong University, Beijing 100044, China
  • Received:2020-03-28 Online:2020-09-15 Published:2020-09-16

Abstract: This research focuses on the joint effect of family social capital and non-family social capital on family firm innovation, and whether this joint effect is stronger than the individual effect of family social capital or non-family social capital, based on the theoretical insights from social capital related research. suggesting that the presence of a strong dominant coalition (family) creates the conditions for a positive reciprocal influence between social communities within an organizational setting. Our study also highlights the moderating effect of family involvement in these relationships. This study uses partial least squares (PLS) modeling in order to analyze the data of 318 survey questionnaires. The results show that different forms of internal social capital have complementary effects on innovation, based on the general view of resource complementarity. Family social capital and non-family social capital have a positive impact on family firm innovation, and the joint effect is better than the single effect of family social capital or non-family social capital; Family control (family ownership and family management) moderates the relationship between family social capital/non-family social capital and family firm innovation, the highest level of innovation is achieved when family and non-family SC and family control are high; Generational involvement moderates the relationship between family social capital/non-family social capital and family firm innovation, the highest level of innovation is achieved when family and non-family SC are high, while generational involvement is low. The research conclusion provides useful experience for improving the effectiveness of relationships within family firms.

Key words: Family Social Capital, Family Involvement, Firm Innovation, Family control, Generational involvement

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