“I Am Different from the Founder”: Second-Generation Involvement in Family Firms and Green Innovation Strategy

We examine the impact of second-generation involvement (succession) in family firms on firms’ green innovation. Our findings suggest that second-generation succession adversely affects green innovation. We also report that a family firm’s changes in loans, government subsidies, and research and development expense mediate the impact of second-generation involvement on green innovation. Additional analyses show that when a successor has shorter tenure length, attains only lesser education, or weaker R&D background, the adverse impact of succession on green innovation is magnified. Also, when a firm has low institutional ownership or state shareholding, the adverse impact is more salient. Overall, we find that succession in family firms is one specific factor, among many, that adversely impacts a firm’s green innovation. Finally, we discuss policy implications for these findings.