Family influence is central in Asian countries; however, little research exists regarding the effects of family ownership and corporate governance on corporate investment decisions. This article examines the relationships among family ownership, board independence, and R&D investment using a sampling of Taiwanese firms. The finding of the negative family ownership—R&D investment relationship suggests that family ownership may discourage risky long-term R&D investment. Such a finding may also suggest that firms with high family ownership may use R&D investment more efficiently and thus need less R&D in relation to firms with low family ownership. In addition, the interaction of family ownership and CEO duality/independent director ratio is negatively/positively related to R&D investment, suggesting that firms with high family ownership may increase R&D investment when the CEO—chair roles are separated or when more independent outsiders are included in the board.

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Manuscript Type Empirical Research Question/Issue Building on resource dependence theory, this paper examines the effect of board capital and the moderating effect of CEO power on R&D investment. Research Findings/Insights Based on a panel of electronics firms in Taiwan, the results indicate that board capital (directors' educational level, directors' industry‐specific experience and interlocking directorate ties) has a positive effect on R&D investment and that CEO power positively moderates this effect. The empirical evidence suggests that when powerful CEOs are present, directors with human and social capital will devote more effort to providing valuable strategic advice and resources and thus will support R&D investment to enhance innovative capabilities. Theoretical/Academic Implications This study contributes to knowledge on corporate governance by bridging the gap in the relationship between board capital and R&D investment via an empirical inquiry into the influence of CEO power on a board's resource provision. The findings suggest that research aiming to elucidate the resource dependence role of board capital in shaping R&D investment should consider the potential moderating role of CEO power. Thus, this study should not only supplement the resource dependence literature by providing a more thorough understanding of the relationship between board capital and R&D investment but also delve into the black box of CEO‐board relations, an important topic within corporate governance research. Practitioner/Policy Implications This study suggests that when the boards of firms competing in innovation through R&D investment (e.g., electronics firms) search for new board members, they should consider the educational level, industry‐specific experience and interlocking directorate ties of potential directors and how those potential directors complement or reinforce the existing board in order to enhance their ability to obtain valuable strategic information and substantial resources that would facilitate better R&D investment decisions. Additionally, those R&D firms may be advised to have a combination of a powerful CEO and a board consisting of directors with more education, directors with industry‐specific experience and directors with interlocking directorate ties because the presence of a powerful CEO may motivate directors to provide ongoing advice and resources, leading to increased R&D investment necessary to enhance innovation capabilities.

Family ownership has been recognized as an important determinant of corporate strategic choices; however, little research investigates the effects of family ownership and corporate governance on internationalization in small and medium‐sized enterprises (SMEs). This paper utilizes agency theory and the resource‐based view to analyze the relationships between family ownership, institutional ownership, and internationalization. Using a sample of Taiwanese SMEs, the finding of a positive family ownership–internationalization relationship suggests that family ownership may encourage internationalization. The interaction of family ownership and institutional ownership is positively related to internationalization, suggesting that SMEs with high family ownership are more likely to internationalize as institutional ownership increases.

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