Eco-Friendly Innovation: How Family Firms in China Struggle with Change

Green innovation is crucial for a sustainable future, and China's SRDI enterprises are no exception. These firms, particularly family-owned ones, have been in the spotlight for their unique strategies called "de-familization. " This process involves shifting management rights and ownership away from family members. But how does this impact their ability to innovate sustainably? Researchers decided to look into this by examining data from 2016 to 2021 for listed SRDI family firms. Using the socio-emotional wealth theory and a fixed-effects model, they discovered that de-familization has a negative effect on green innovation. This is due to changes in corporate governance. However, digital transformation can help ease these negative effects. On the other hand, market concentration makes things worse. Interestingly, the impact is stronger in firms that were designated as "Little Giants, " received higher government subsidies, were located in eastern regions, or weren't major polluters. These findings offer valuable insights for SRDI family firms. They suggest that strategic management of de-familization, optimizing resource allocation, and customizing governance strategies can promote sustainable growth.