Year of Graduation
Family Ties and Involvement Impact on Innovations in High-Tech Firms
This paper investigates the impact of family participation in business and family connections between top management and governance on innovation process in high-tech companies from S&P500 index over the period 1999-2017. High-tech companies appear to be a good sample choice, considering well-known paradox of family firms: they tend to invest less in innovation, while producing them more effectively. In this paper we demonstrate that this paradox is not so obvious for technological companies. We conclude that founder`s involvement and CEO`s ownership of an equity share leads to higher R&D expenditures, income margins and greater number of patents in pharmaceutical and IT sectors. However, consistent with the previous studies of family participation in business, family ownership accompanied by holding offices of CEO and Chairman, has negative impact on amounts spent on innovations.