How Does Successor’s Power Affect Innovation Investment in Chinese Family Firms? Based on Organizational Identification Theory

The innovation investment willingness of family businesses has long been a focus of academic research. Within the context of intergenerational succession, how successors influence firms’ innovation investment behavior is crucial to the sustainable development of family businesses. Drawing on organizational identification theory and employing a dual analytical framework of willingness and capability, this study investigates the impact of different types of successors’ power on corporate innovation investment. Through empirical testing using a sample of Chinese listed family firms from 2009 to 2020, the research finds that both the formal and informal power of successors promote corporate technological innovation investment, but the effect of informal power is stronger. A significant synergistic effect exists between the two in driving innovation. Furthermore, the external competitive market environment strengthens the positive impact of successors’ power on innovation investment, with a more pronounced effect on informal power. By incorporating the Chinese context, this study provides an in-depth analysis of the mechanisms through which successors’ power structures influence corporate governance behavior. It reveals the distinct behavioral logic of successors after taking over the firm, offering a theoretical foundation and practical implications for family businesses in selecting suitable successors and optimizing power allocation.