Conservative Stewards or Green Pioneers? The Impact of Family Governance on Eco‐Innovation

ABSTRACT The debate over whether family involvement acts as an accelerator or a brake on corporate eco‐innovation continues among scholars and entrepreneurs. Integrating the paradoxical lens of socioemotional wealth theory, we argue that, compared with family ownership, family governance not only strengthens the entrepreneurial family's need to protect extended socioemotional wealth, centered on emotional attachment, identity and belonging among family members, firm and family reputation, and the perpetuation of the family dynasty, but also reduces their perceived threat of potential harm to restricted socioemotional wealth, which focuses on family control and influence. Thus, family governance promotes both compliant and strategic eco‐innovation. Specifically, family governance encourages compliant eco‐innovation by shaping stakeholder orientation and drives strategic eco‐innovation through fostering entrepreneurial orientation. The positive impact of family governance becomes more pronounced under greater media coverage, while performance shortfalls strengthen its role in promoting strategic eco‐innovation. This study extends research on the drivers of corporate eco‐innovation and contributes to the literature on innovation in family businesses.