| Why have most of the newly emerging enterprises during the economic transition in China been family businesses (FBs)? Why are FBs still the dominant form of economic organization in the world? In contrast to Adam Smith, the father of economics, his followers separated the issues of morality and family from economics and left these issues to other areas in social sciences. It seems that FBs have no room in mainstream economics, and that modern theories of the firm cannot explain their existence satisfactorily. Although modern economics has absorbed nutrients from other branches of social sciences and developed many new research areas, there are fewer literatures for analyzing the phenomena of FBs more comprehensively. This dissertation is trying to break through the boundaries of the traditional division by systematically investigating FBs, an issue of great practical and academic significance, from the angles of economics, sociology and biology.The thesis begins an introduction that outlines the relevant theories. Three fundamental hypotheses are included in this part. (1) Every "economic person" is a "biological person" that comes from a certain family. (2) Information is asymmetrical from person to person. (3) Institutional forms vary. Based on the analysis of the "invisible hand" of the market and the "visible hand" of the state, a theory that the family institution may act as another "invisible hand" is presented.Part â… (from chapters 1 to 4) proposes that the FB is a type of economic organization determined by family genes (FGs), and is affected by the macro environment for economic development. Chapter 1 analyses FGs, the endogenous factors of FBs, which are composed of four bases: selfishness, mental models, altruism, and culture. Due to FGs, FBs show three vital characteristics: the adaptability, the diversity, and the lifecycle. Therefore, a FB can be defined as a type of business organization whereby FGs determine the resources collocation of firms, and certain families own the firms' rights control as well as all or parts of property. From the angles of labor division and specialization, and of that information is asymmetry between any two participants, a new theoretic framework for enterprises is established based on enterpriser-enterprises (chapter 2). The framework consists of two chains-one is the chain of division-specialization-info rent, and the other is the chain of motivation-restriction-info cost. Accordingly, the FB can be considered as an institutional arrangement in which the motivation-restriction strategy of both contract types and status types are chosen effectively based on the principle ol the division of labor. Chapter 3 discusses entrepreneurs in FBs as the personal representatives. They progress in developing their human capital, physical capital, and social capital, which this thesis calls the three-dimensional development mechanisms of entrepreneurs. During this period of economic transition, FB owners tend to choose internal finance to dominate the administration of their own enterprises, which solves puzzle of truncated property in state-owned enterprises (chapter 4). An analysis of the information status, entrepreneurs' circumstances, and financial conditions in the economic transition indicates that the FB is a suitable institutional arrangement in China.Part â…¡ (from chapters 5 to 6) focuses on how the family institution penetrates publicly owned enterprises by FGs and consequently, speeds up the economictransformation of this sector. In the period of the planned economy in China, administrative orders, instead of families and markets, allocated resources. Thus the function of FGs was inhibited and state-owned enterprises acted as the basic economic units. Since the early 1980s, China has adopted economic reform policies that are market-oriented and reinstated the family as the basic economic unit. These policies have provided the opportunity for the infiltration of household deposits and human capital into state-owned businesses and the emergence of qu...
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