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Study On The Influence Of Industrial Policy On The Relations Of Agency Conflicts And Family Firm’s Capital Allocation Efficiency

Posted on:2015-03-19Degree:DoctorType:Dissertation
Country:ChinaCandidate:J ZhangFull Text:PDF
GTID:1269330422971413Subject:Accounting
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From a global perspective, the development of family firms has been widelyconcerned. More and more studies suggest that the family firm has great vitality. Atpresent, not only in the majority of developing countries, family firms occupy animportant position in the social economy;in some developed countries and regions,family firms also accounted for not a small proportion. Although the developmentprocess of family firms didn’t last long in China, its development trend and socialcontribution cannot be ignored.However, with the strong development of family firms, a lot of problems are alsoexposed, such as: internal contradictions and succession issues in enterprises likeearthquakes affect its normal operation, this may cause irreparable harm to the company.At the same time it is reported frequently that family shareholders encroach on socialshareholder interests through illegal guarantee and the illegal occupation of funds whichTunnel the listed company. The above problems caused many questions and criticismsfor corporation’s governance, related research also have big differences. On the basis ofthe traditional agency theory, it is the big shareholders who participate in themanagement could reduce the conflict of first kind of agency, improve the efficiency ofallocation of resources of enterprise, and enhance the enterprise value.But somescholars proposed that in the mode of family management, the internal relationship offamily may further aggravate the agency conflict and cause the problem of lowefficiency. In addition, the family business generally used the pyramidal ownershipstructure, which could relieve the financial pressure of family group enterprise, and alsomay be an important way of family shareholders to tunnel listed company.In our country the research on enterprise problem cannot do without consideringexternal specific institutional environment. Strong government intervention is one of theimportant characteristics of China’s institutional background. Industrial policy is animportant flexible policy, is also a commonly used means of government intervention,which played a significant role in the economic life and has a profound impact oninvestment and financing environment of enterprises. Can the industrial policies benefitthe family firm which has long been in the financial crimination? What kind of impacton investment efficiency of family firm can the improvement of investment financingconstraints have? In the face of the above differences and problems, this paper starts from analyzingthe problem of the family firm’s agency, deeply studies the internal mechanism offamily involvement which affect the behavior of financial companies, mainly from theinvestment, financing perspective discuss the enterprise economic consequences offamily involvement. Further, the thesis discusses investment and financing efficiency ofthe heterogeneity of family enterprise based on external industrial policy. The contentand conclusion of this paper includes the following sections:The first chapter is introduction. In this chapter, it explains the research purpose,introduces the theoretical value and significance of this study, and the main researchcontents, research ideas, research characteristics and contributions of the dissertation.The second chapter is the Literature review. It is divided into two parts,one isabout the literature on the governance characteristics, investment and financing of thefamily involvement business, the other is the literature about the microeffect ongovernment intervention, industrial policy.The third chapter is the analysis of theoretical basis and the institutionalbackground. Firstly, it introduces the principal-agent theory, the stewardship theory andthe altruism theory which bridges two theories high closely related to our study. Thispaper analyzes each level of the principal-agent relationship of the family firms, andexpounds the contents of stewardship theory, then interprets how the altruism theoryimplements the connection between principal-agent theory and the stewardship theory.Secondly, based on the perspective of corporate governance, the paper details theinvestment and financing theory of the enterprise. Thirdly, under the Chinesetransitional economy background, the thesis analyses evolution of family business, theallocation of capital and reviews implementation process of industrial policy inChina.At last the chapter Constructs a theoretical framework of the influence ofindustrial policy on the family business agency conflict and resource allocationefficiency.The fourth chapter studies the industrial policy, the agency conflict and investmentefficiency of the family firm. Firstly, according to the extent of the involvement offamily firm, this chapter divides the family firms into two types:family-high-involvement firm and family-low-involvement firm. The chapter finds thatalthough the founder of enterprises as CEO has weakened the conflict of first kindagency, then improved the efficiency of investment, the family altruism has increasedthe conflict of first kind agency, reduced the efficiency of investment significantly. Overall under the institutional background in China, the family-high-involvement firmmainly faces the first agency conflict. On the other hand, family-low-involvement firmmainly faces the second kind of agency problem, and the separation between controlrights and cash flow rights increases the agency conflicts and reduces the efficiency ofinvestment. This paper believes that, under the current institutional background, theagency problem of family-high-involvement firm is more serious thanfamily-low-involvement firms,and the efficiency of investment is lower. Further, theinfluence of industrial policy to investment efficiency on the level of involvementbetween two kinds of family firms has been studied. The results show that the industrialpolicy has improved the financing environment of the family firm significantly,increased the investment efficiency of low involvement family firm, but reduced theinvestment efficiency of high involvement family firm dramatically.The fifth chapter studies the industrial policy, agency conflict and efficiency ofR&D investment in family firm. This chapter studies the different kinds of agencyproblems thoroughly between the high and low involvement of two family firms, fromthe perspective of two basic factors of family firm’s R&D Investment: risk aversion andlong-term investment. Firstly the chapter investigates the influence from the altruism,founder effect and separation effect between control rights and cash flow rights to R&Dinvestment intensity on the level of involvement of two kinds of family companies.Secondly, the chapter compares the difference of R&D investment intensity betweentwo types of family firms. Furthermore, the chapter studies the interact effect of externalnational industrial policy and family involvement on the value of R&D investment inlisted companies. we can infer that the R&D investment intensity of the highinvolvement family firm is smaller than the low involvement family firm; It is thenational industrial policy that encourages the relaxation of the financing environment offamily business, but lowers the value of the family firm’s R&D investment effect, andthe impact on the high involvement family firm is more significant.The sixth chapter studies the industrial policy, the agency conflict and debtfinancing efficiency of the family firm. Based on dividing the family firms into twotypes: high involvement family firm and low involvement family firm, and from the twobasic motives of family capital structure choice: keep the right of control and riskaversion, the chapter analyses the impact of family involvement on the efficiency ofdebt financing under the influence of different agency problem. Further, this chapterstudies interaction effect of listed Company’s debt financing efficiency under the influence of the external industrial policies of the state and extent of family involvement.The findings indicate that in family firm of high involvement its debt financingefficiency is relatively lower; the national industrial policy encouraging the relaxationof financing environment of family firm, brings more money to the family firm, butreduces the efficiency of debt financing in high involvement family firm,andimproved the efficiency of debt financing in low involvement family firmThe seventh chapter is the conclusion and prospect.This chapter includes thepaper’s research conclusion, suggestions, limitations and the prospect of future researchdirection.
Keywords/Search Tags:Family Involvement, Agency Conflict, Industrial Policy, Capital AllocationEfficiency
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