The effect of interference by affinal relatives on innovation investment in family businesses

Purpose This paper aims to investigate the following issues: the influence of affinal relatives as decision-makers on the level of innovation investment in family businesses and the moderating effect of affinal relative participation in joint entrepreneurship with the ultimate owner, as well as consanguineous authority. Design/methodology/approach This study categorizes decision-makers in family businesses into consanguineous and affinal relatives, investigating the impact of affinal relatives as decision-makers on the level of innovation investment in family businesses. A research model is further developed, incorporating affinal relative participation in joint entrepreneurship and consanguineous authority as moderating variables. Data from Chinese family businesses between 2008 and 2020 are collected as samples for analysis. Findings In comparison to the consanguineous relatives, affinal relatives acting as decision makers may weaken the level of innovation investment in family businesses. When affinal relatives participate in joint entrepreneurship, the negative impact of decision-makers who are affinal relatives on innovation investment is reduced. As consanguineous authority rises, the negative correlation between decision-makers who are affinal relatives on innovation investment is also reduced. Originality/value This study provides a new perspective for understanding the antecedents of innovation investment in family businesses. It contributes to a deeper understanding of the mechanisms underlying the decision-making behaviors of family members, while also enriching the research on knowledge management in family businesses.