Final published version
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Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - When is R&D beneficial for family firms?
T2 - The concurrent roles of CSR and economic conditions
AU - Hu, Qilin
AU - Hughes, Paul
AU - Hughes, Mathew (Mat)
AU - Chapman, Gary
AU - He, Xinming
PY - 2023/6/30
Y1 - 2023/6/30
N2 - How family firms innovate has captivated scholars for over a decade. However, an investigation into the benefits of research and development (R&D) for family firm value under differing economic conditions has received little attention in the family firm innovation or R&D literature. This study examines the relationship between R&D intensity and firm value among listed family firms during the economic recession period of 2007–2010 and nonrecessionary periods (referred to as normal periods) in the US between 1995 and 2013. Based on behavioral agency theory, we evaluate the moderating effects of investments in inward-looking and outward-looking corporate social responsibility (CSR) initiatives on this relationship. We hypothesize that R&D intensity is negatively related to family firm value during a recession period, but outward-looking CSR positively moderates the relationship between the two. The opposite is hypothesized during normal periods. The results support the assertions that outward-looking CSR can ease the negative impact brought about by R&D intensity on firm value during a recession period, while inward-looking CSR investments surprisingly bear no effects. Important implications for research, family firm leaders, and R&D managers are discussed.
AB - How family firms innovate has captivated scholars for over a decade. However, an investigation into the benefits of research and development (R&D) for family firm value under differing economic conditions has received little attention in the family firm innovation or R&D literature. This study examines the relationship between R&D intensity and firm value among listed family firms during the economic recession period of 2007–2010 and nonrecessionary periods (referred to as normal periods) in the US between 1995 and 2013. Based on behavioral agency theory, we evaluate the moderating effects of investments in inward-looking and outward-looking corporate social responsibility (CSR) initiatives on this relationship. We hypothesize that R&D intensity is negatively related to family firm value during a recession period, but outward-looking CSR positively moderates the relationship between the two. The opposite is hypothesized during normal periods. The results support the assertions that outward-looking CSR can ease the negative impact brought about by R&D intensity on firm value during a recession period, while inward-looking CSR investments surprisingly bear no effects. Important implications for research, family firm leaders, and R&D managers are discussed.
U2 - 10.1111/radm.12580
DO - 10.1111/radm.12580
M3 - Journal article
VL - 53
SP - 524
EP - 542
JO - R&D Management
JF - R&D Management
IS - 3
ER -