Transgenerational Control Intentions and Innovation Spending: A Behavioral Contingency Model

This study presents a behavioral contingency model outlining how the effect of family ownership control on firm-level innovation spending decisions depends on whether or not the family has transgenerational control intentions and how, in turn, this effect of transgenerational control intentions depends on the financial position of the firm. Our model is tested using a sample of 4,938 German enterprises. The empirical results reveal the important role that transgenerational control intentions play in shaping family-owned firms’ innovation spending decisions, and show that the firm’s financial position has a substantial bearing on the nature of this effect. We discuss key academic and practical implications of these findings