The Impact of Government Subsidies on Green Innovation in Family Firms - Evidence from Chinese Family Firms

Guangshun Cheng; Xiaoqing Dong; Pengwei Yuan

doi:10.6911/WSRJ.202501_11(1).0008

Authors

Guangshun Cheng
Xiaoqing Dong
Pengwei Yuan

DOI:

https://doi.org/10.6911/WSRJ.202501_11(1).0008

Keywords:

Family firm, Government subsidy, Substantive green innovation, Strategic Green Innovation, EPU, Family involvement.

Abstract

Family firms are an important part of the world economy, but the R&D investment of Chinese family firms is generally insufficient. Research Objective: To explore the influencing factors of green innovation in family firms. Research Method: Based on the collected data related to Chinese listed family firms from 2008-2021, empirical regression was conducted to analyse the impact of government subsidies on substantive and strategic green innovation of family firms; considering economic policy uncertainty and family involvement, its moderating role in the above impacts was further analysed. Findings: Government subsidies promote both substantive and strategic green innovation in family firms, and the mediation effect test finds that government subsidies promote substantive and strategic green innovation in family firms by increasing R&D investment in family firms; further research finds that both economic policy uncertainty and family involvement negatively moderate the relationship between government subsidies and substantive and strategic green innovation in family firms. Further, it is found that both economic policy uncertainty and family involvement negatively moderate the relationship between government grants and family firms' substantive and strategic green innovation. Conclusion: The government can provide more R&D subsidies for family firms or alleviate the financing constraints of family firms, and ensure the consistency and stability of the policy to a certain extent, and the degree of family involvement in family firms needs to be reduced, and the gradual separation of the ownership and management rights should be carried out.

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