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The authors study the effects of altruism and intention for succession on family firm's reputation risk-taking behaviors in Chinese publicly listed companies.

The authors use earnings management as a proxy for reputation risk in family firms, and hand-collected relationship between family members to measure the closeness of incumbent family members and their potential successors as a proxy for the altruistic degree.

Results show that, in developing countries like China, familial altruism in family firms with succession plans, which does not reduce the practice of earnings management, should be considered by practitioners while detecting it.

The hand collected data are very unique; the authors have focused on the relationship between incumbents and successors and the authors define their closeness by using genes shared between them.

The purpose of this paper is to examine the generational differences among publicly traded family firms in regards to value creation and value appropriation in the innovation process by drawing upon the knowledge-based view (KBV) and family business literature with a focus on socioemotional wealth perspective.

The authors tests the hypotheses via longitudinal regression analyses based on 285 yearly cross-firm S & P 500 firm observations.

First, the authors found that family ownership with second or later generation’s majority exhibits lower levels of value creation capabilities compared to non-family firms, whereas there is no difference between those of the firms with family ownership with a first generation’s majority and non-family firms. Second, the authors also found that family owned firms with a first generation’s majority have higher value appropriation abilities compared to nonfamily firms, while there is no significant difference in value appropriation between the later generation family firms and non-family firms.

The study help scholars, family business members, and investors better understand family involvement, and how it impacts firm performance through value creation and value appropriation.

The paper contributes to the family business, innovation, and KBV literature in several ways. While previous family business studies drawing upon resource-based view and KBV often focus on the value creation in family governance, the authors investigate both value creation and value appropriation phases of innovation process.