Abstract
Purpose: The paper aims to examine the effect of corporate governance (CG) on innovation investment, with consideration of ownership types and legal jurisdictions.
Design/methodology/approach: The authors' empirical analysis is based on a sample of publicly listed family businesses (FBs) from the top-500-list that matched worldwide with non-family counterparts from 2009 to 2018. The study uses a holistic measure of CG to mitigate the conflicting impact of individual CG components found in prior studies. This measure is applied to examine the moderating role of firm ownership type and legal jurisdiction.
Findings: The authors' results demonstrate that CG positively influences innovation investment. This positive relationship is more pronounced in FBs than in non-family businesses (NFBs) and is more prevalent in civil law economies than in common law economies.
Originality/value: The study holistically examines the effect of CG, capturing the combination of all individual governance mechanisms and their influence on innovation investment. The study further shows that comprehensive CG has diverse impacts on innovation investment when considering family control and legal jurisdiction.