Does Sister Co‐Governance Affect Family Firms' Environmental Innovation? The Role of Long‐Term Orientation and Organizational Inertia

The involvement of family members is an extremely important factor in a firm. In particular, sister co‐governance has become one of the most common governance models in the development of family firms in China. However, there is little academic understanding of how this influences environmental innovation within family firms. To address this gap, we integrated the theories of feminist caring and socioemotional wealth. Furthermore, we examined the mediating effect of long‐term orientation and the moderating influence of organizational inertia. To test our hypotheses, we selected 1050 family firms listed on China's Shanghai and Shenzhen stock markets from 2015 to 2021 as the research sample. The results showed that sister co‐governance had a positive influence on family firms' environmental innovation. This relationship was mediated by the firm's long‐term orientation. However, organizational inertia weakened the positive impact of sister co‐governance on the firm's long‐term orientation.