Pursuing Gains or Avoiding Losses: The Contingent Effect of Transgenerational Intentions on Innovation Investments

Yannick Bammens*, Paul Hünermund, Petra Andries

*Corresponding author for this work

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Many business-owning families aspire to someday transfer their firm to the next family generation. Controversy surrounds the question of how these transgenerational intentions affect risky growth strategies such as investments in innovation: some emphasize the positives of a transgenerational time horizon for investments in future growth, others highlight the negatives of a more conservative mindset with amplified concern for stability and risk avoidance. Using regulatory focus theory, we resolve this long-standing controversy about the impact of transgenerational intentions by theorizing how they can trigger a promotion focus with increased innovation spending or a prevention focus with reduced innovation spending, depending on the firm’s survival hazard. Based on a sample of around 3,900 German firms using OLS and 2SLS estimation, we find empirical support for our predictions. This study extends the mixed gamble lens on family firm decision-making with insights from regulatory focus theory to build consensus on the role of transgenerational intentions while shifting consensus on the role of family ownership in relation to the innovation spending decision.
Original languageEnglish
JournalJournal of Management Studies
Issue number6
Pages (from-to)1493-1530
Number of pages38
Publication statusPublished - Sept 2022

Bibliographical note

Published online: 16 November 2021.


  • Family business
  • Innovation
  • Mixed gamble
  • Regulatory focus
  • Risk
  • Time horizon

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