Ownership concentration and product innovation in Chinese private SMEs

Ziliang Deng, Peter S. Hofman, Alexander Newman

    Research output: Journal PublicationArticlepeer-review

    78 Citations (Scopus)

    Abstract

    Product innovation is extremely important to the growth, success, and ultimate survival of firms. Although its unique features in small and medium-sized enterprises (SMEs) have gained growing attention in the literature, there is limited knowledge as to how ownership concentration moderates the relationship between product innovation and its determinants. Based upon insights from agency and institutional theories, we examine the moderating effects of ownership concentration on the relationship between product innovation and its key determinants in Chinese SMEs, utilizing a large dataset of 43,728 Chinese firms over the period 2005-2006. We focus on examining the differences between single-owner SMEs, where there is dominant control of one family member, and multiple-owner SMEs, where principal-agent conflicts and principal-principal conflicts are more likely to occur. Our findings indicate that single-owned firms tend to convert research and development into product innovation more efficiently than firms with multiple owners, who are typically better at utilizing external sources of knowledge and human capital.

    Original languageEnglish
    Pages (from-to)717-734
    Number of pages18
    JournalAsia Pacific Journal of Management
    Volume30
    Issue number3
    DOIs
    Publication statusPublished - Sep 2013

    Keywords

    • China
    • Family ownership
    • Private sector
    • Product innovation
    • Small and medium-sized enterprises

    ASJC Scopus subject areas

    • Business and International Management
    • Economics, Econometrics and Finance (miscellaneous)
    • Strategy and Management

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