Evaluation on innovation efficiency of successor of Chinese listed family business based on DEA

Abstract

Purpose

The purpose of this study was to measure the innovative performance of a managed and owned mainland Chinese family business. The objective of the study was to assist an inheritor and/or successor of a family business and to find management problems in innovative activity.

Design/methodology/approach

To improve the innovative technical efficiency (TE) of the business, the study offers methods that enhance the allocation of resources to provide outcomes that improve the core competitiveness of the business and realize the sustainable development of the business. Innovation performance is a well-organized and efficient way of turning innovation input into innovation output. Human input, research and development expenditures measure innovation input. Patent output and other outputs, which include total labor productivity and asset liability ratios, measure innovation output. To complete the study’s task, the innovative performance of 46 Chinese listed family run and owned businesses were evaluated based on the data envelopment analysis and the Banker, Charnes and Cooper model.

Findings

The results of the study show that the overall TE of innovation in a Chinese family run and owned business is low and that the returns to scale of most such businesses is decreasing, and furthermore, that the overall innovation performance of is low.

Originality/value

The implications from the study further suggest that for business efficiency and increased profit a beneficiary of a Chinese family-owned business should optimize the firm’s size and resource allocation.

Citation

Wang, Q. and Wu, Q. (2018), "Evaluation on innovation efficiency of successor of Chinese listed family business based on DEA", International Journal of Innovation Science, Vol. 11 No. 3, pp. 454-470. https://doi.org/10.1108/IJIS-03-2019-0027