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Empirical study reveals how cognitive differences between successor CEOs and top managers affect innovation in family firms, suggesting internal conflicts shape strategic investments.
Purpose Grounded in upper echelons theory (UET) and conflict theory, the purpose of this study is to analyzes the innovative behavior of family firms from the perspective of the cognitive differences between successors and senior managers. Design/methodology/approach This research employed a sample listed family firms in China. The obtained results were subjected to hierarchical regression analysis, complemented by rigorous model robustness testing through propensity score matching and regression with substitution variables. Findings Successors engender task conflicts with family members in the top management team (TMT) due to cognitive differences, thereby stimulating corporate innovation. Conversely, successors engender relationship conflicts with non-family members in the TMT, impeding innovation. Furthermore, the performance expectations and the gender of the successor CEO also influence the relationship between cognitive differences and innovation between the successor and the TMT. Originality/value This study's originality and value lie in its innovative application of UET and conflict perspectives to dissect the intricate layers of intergenerational cognitive differences and their impact on the innovative behavior of family firms. It augments our comprehension of how the internal dynamics within family firms shape strategic innovation decisions.
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Chen et al. (2024) studied this question.
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