Family firm R&D investments in the 2007–2009 Great Recession

Xian Sun, Soo Hoon Lee, Phillip H. Phan

Research output: Contribution to journalArticlepeer-review

9 Scopus citations


Investments in research and development (R&D) are essential to innovation, long-term value creation, and wealth accumulation. Since family wealth and firm performance are tightly coupled in family firms, how they invest during times of economic distress matters to their wealth accumulation over the generations. In this study, we examined the impact of the 2007 Great Recession on the R&D decisions of publicly-listed family firms in the United States. We compared family and non-family U.S. firms, excluding those in the financial sector, with total assets greater than $1 million for the period 1992 to 2015. Using the behavioral agency model, we hypothesized that among firms that were not financially constrained during the economic crisis, family firms were more likely than non-family firms to invest in R&D. The results support this hypothesis, lending credence to the notion that family firms undertook more risks when performance is below their long-term aspirations during economic downturns.

Original languageEnglish (US)
Article number100244
JournalJournal of Family Business Strategy
Issue number4
StatePublished - Dec 2019


  • 2007 recession
  • Accounting ratios
  • Crisis investments
  • Family enterprise
  • Financial constraints
  • Firm performance
  • Innovation
  • R&D expenditures

ASJC Scopus subject areas

  • Economics and Econometrics
  • Strategy and Management


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