Driving Innovation: Exploring the Interplay of Family Ownership, State Ownership and Management Control

Abstract

This article empirically investigates the effect of family ownership, state ownership and management control on the innovation of listed firms in China. Using unique data available for Chinese listed companies on control, this study examines if having controllers (single, joint, family or institution) is more beneficial for innovation than not having any. This research also assesses the moderating effects of the top management team’s (TMT) education level, the degree of marketisation of the provinces in which the firms are located and the time elapsed since IPO on the relationship between ownership and innovation. The current article considers both innovation counts as well as innovation quality. The findings of this work reveal that (a) family ownership is not correlated with innovation outcomes but state ownership is; (b) having controllers is more beneficial for innovation than not having any; (c) TMT’s educational level and the time elapsed since IPO positively moderate the relationship between ownership and innovation outcomes and (d) TMT educational level and the time elapsed since IPO positively moderate the relationship between having an actual controller and innovation outcomes.