When is R&D beneficial for family firms? The concurrent roles of CSR and economic conditions

Hu, Qilin; Hughes, Paul; Hughes, Mathew (Mat); Chapman, Gary; He, Xinming

Abstract

How family firms innovate has captivated scholars for over a decade. However, an investigation into the benefits of research and development (R&D) for family firm value under differing economic conditions has received little attention in the family firm innovation or R&D literature. This study examines the relationship between R&D intensity and firm value among listed family firms during the economic recession period of 2007–2010 and nonrecessionary periods (referred to as normal periods) in the US between 1995 and 2013. Based on behavioral agency theory, we evaluate the moderating effects of investments in inward-looking and outward-looking corporate social responsibility (CSR) initiatives on this relationship. We hypothesize that R&D intensity is negatively related to family firm value during a recession period, but outward-looking CSR positively moderates the relationship between the two. The opposite is hypothesized during normal periods. The results support the assertions that outward-looking CSR can ease the negative impact brought about by R&D intensity on firm value during a recession period, while inward-looking CSR investments surprisingly bear no effects. Important implications for research, family firm leaders, and R&D managers are discussed.

Citation

Hu, Q., Hughes, P., Hughes, M. (., Chapman, G., & He, X. (2023). When is R&D beneficial for family firms? The concurrent roles of CSR and economic conditions. R&D Management, Article 12580. https://doi.org/10.1111/radm.12580

• Journal Article Type: Article
• Acceptance Date: Feb 3, 2023
• Online Publication Date: Feb 21, 2023
• Publication Date: Feb 21, 2023
• Deposit Date: Feb 6, 2023
• Publicly Available Date: Feb 22, 2025
• Journal: R&D Management
• Print ISSN: 0033-6807
• Electronic ISSN: 1467-9310
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Article Number: 12580
• DOI: https://doi.org/10.1111/radm.12580
• Keywords: R&D intensity; Family firms; Corporate social responsibility; Outward-looking CSR; Inward-looking CSR; Economic recession; Firm value; Tobin's Q; Family firm
• Public URL: https://nottingham-repository.worktribe.com/output/17070252
• Publisher URL: https://onlinelibrary.wiley.com/doi/full/10.1111/radm.12580
• Additional Information: This is the peer reviewed version of the following article: Hu, Q., Hughes, P., Hughes, M., Chapman, G. and He, X. (2023), When is R&D beneficial for family firms? The concurrent roles of CSR and economic conditions. R&D Management., which has been published in final form athttps://doi.org/10.1111/radm.12580. https://onlinelibrary.wiley.com/doi/10.1111/radm.12580