Exploring the Interplay of Corporate Governance, inter-generational Inheritance, and Innovation Strategy Driven by Socio-Emotional Wealth

Abstract

As an important part of the global economy, family firms, with their unique dual logic (family logic and corporate logic), exhibit significant features in their organizational forms and development paths. This study takes family firms as the research object, focusing on the interaction of its dual logic and their impact on the relationships between corporate governance, inter-generational inheritance, and innovation strategy. Through literature analysis, case studies, combined with domestic and international classic literature such as socio-emotional wealth theory and incomplete contract theory, this study reveals the characteristics of family firms in terms of concentration of ownership, closure of inter-generational inheritance, and innovation decision-making. It is found that socio-emotional wealth (SEW) is a core driver of family firms' decision-making, but it may also inhibit innovation and external resource integration; balancing this tension is therefore critical The conclusion suggests that family firms need to optimize their shareholding structure, establish a compensation mechanism for SEW, and progressively open up their operating rights to achieve sustainable development.