Abstract:     Innovation decisions in family businesses exhibit distinct "familism" characteristics, with the family business owners′ familism culture values being a decisive factor influencing innovation behavior. Based on the perspective of socioemotional wealth (SEW), this paper empirically examined the impact of family owners′ familism culture values on family firms′ innovation investment by using a panel data sample of China′s A-share family listed firms from 2007 to 2019 and constructed proxy variables for familism culture based on the data collected from the World Values Survey in China. This study found that: (1) there is a U-shaped relationship between familism culture and firms′ innovation investment, which means that there are two sides in the influence of familism culture on family firms′ innovation investment; and (2) the regional development of marketization institutions strengthens the U-shaped relationship. Further analysis revealed that there is also a U-shaped relationship between familism culture and firms′ innovation output. Finally, this paper found that familism culture eventually brings changes to firm performance, showing an inverted U-shaped impact on short-term operating performance and a U-shaped impact on long-term market value. Overall, this study has theoretically expanded the research scope of the economic consequences of familism culture, and further deepened the understanding about the innovation decisions of family firms, and it will also provide valuable practical implications for policymakers and entrepreneurs regarding how to effectively improve family firms′ innovation activities.

Key words: familism culture, family firm, socioemotional wealth (SEW), innovation investment, institutional environment