The Impact of the Family Control on the Innovative Investment: Moderating Effect of Founding Family and Political Connection

In this paper, we attempted to validate the impact of family businesses, a distinct corporate structure, on innovative behavior. The role of family control, which is unique to family businesses, received special attention. In this study, we used agent theory and social-emotional wealth theory to test the effect of family control on creative investment. Furthermore, we attempted to confirm the moderating effect of the negative (-) of political connection, as well as the moderating effect of the definition of entrepreneurship as moderating variables that influence the effect of family control on innovative behavior. To that goal, the research hypotheses were validated using 5,120 samples of 1,024 family businesses listed from 2015 to 2019. According to the study's findings, the family control ratio and innovative behavior have a negative (-) link, and family control in publicly listed family enterprises that have started their own ventures can reduce the negative impact on corporate innovation investment. But, the political connection has been rejected. According to this study, the more the family composition control, the lower the corporate innovation investment; so, if family businesses want to grow, they should encourage innovative behavior and increase their interest in innovation support policies. Furthermore, it should be recognized that family control of self-starting family businesses can minimize negative effects on corporate innovation investment and increase availability.