A Study On The Level Of Risk-taking In The Intergenerational Inheritance Of Chinese Family Businesses

In the 40 years of reform and opening up,China's first batch of entrepreneurs has gradually reached the retirement age,and some family businesses are entering or about to enter the period of intergenerational succession.Intergenerational succession is a very important event for family businesses,and it may become a turning point for a business from prosperity to decline,and may also be a watershed for a company from weakness to strength.However,many family businesses have encountered difficulties in risk-taking in the intergenerational succession period.A moderate level of risk-taking means that the family business can grasp the opportunities contained in uncertainty to obtain profits during the intergenerational succession period;insufficient risk-taking may indicate that it is difficult to smoothly transition between generations.However,under such a realistic background,few studies have paid attention to the risk-taking level of the intergenerational succession of Chinese family businesses.This paper is rooted in the background of the Chinese system,and uses a lot of subject knowledge to build a theoretical analysis framework for the intergenerational succession of Chinese family companies,empirically test the relevant data of Chinese listed family companies,and try to answer two core research questions: "how does intergenerational succession affect the risk level of family companies?" and "Which mechanism is used to improve the risk-taking level of the family business during the intergenerational succession period? " According to the setting of research questions,the main work and conclusions of this paper are as follows:1.Analyze the institutional basis of intergenerational succession of family businesses.This part uses the theory and method of the new institutional economics to analyze the system and the changes of the system,and discusses in detail the institutional environment and the process of institutional evolution of Chinese family businesses.It is proposed to understand the institutional environment of Chinese family business' s intergenerational succession from the four dimensions of structure,cognition,politics and culture.At the same time,the institutional evolution mechanism of intergenerational succession is that new rules and beliefs gradually replace old rules and beliefs.And the change of the belief system is the root of the institutional evolution mechanism.Finally,when evaluating the economic consequences of the intergenerational succession of the family firms,we should consider the trade-off between the economic and non-economic goals in family firms.2.Exploring the theoretical analysis theoretical basis of intergenerational succession and risk level of family business.Through theoretical analysis,this part proposes that the essence of intergenerational succession of family businesses is to pass explicit control and implicit authority to the family successor.Mathematical analysis proves that family successors should control key resources,so that improve the level of risk-taking,coordination and corporate value.If the family successor does not get enough control,or even other participants control key resources,the risk level of the family business will be lower than optimal.3.Investigate the impact of intergenerational succession on the level of family business risk-taking.First of all,through empirical analysis,this part found that after the family business enters the implementation period of intergenerational succession,the level of corporate risk-taking will decrease;secondly,under the succession path of professional managers transferring to family members,the negative effect of the level of risk-taking is more obvious;again,the level of corporate risk-taking under the founder's weak participation is lower than the level of corporate risk-taking under the founder's strong participation;finally,intergenerational succession causes corporate accounting performance to decline through the path of corporate risk commitment.4.Investigate the impact of second-generation successors' social capital on corporate risk-taking levels.This section attempts to introduce the "embeddedness" theory in the new economic sociology to explore the implementation period of intergenerational succession.Empirical analysis finds that in the intergenerational succession period,the social capital of the second generation successor helps to improve the level of corporate risk-taking,but this effect will be weakened in areas with higher government quality.Besides,Regardless of the quality of the local government,the second-generation successor's non-powered social capital will raise the level of corporate risk-taking;but when the local government's quality is low,the second-generation successor relies more on the power of social capital to improve the level of corporate risk-taking.5.Explore the relationship between second-generation participation,diversification strategies,and corporate risk-taking levels.This section attempts to establish an analysis framework of “succession-strategy-risk”,and deeply studies the influence mechanism and risk-taking consequences of the second generation of family participation on the diversification strategy based on the process view.The research results show that in the intergenerational succession preparatory period,the family business is more inclined to diversification strategy,which helps to improve the level of enterprise risk-taking.In the intergenerational succession implementation period,the family business is less diversified and even turns to specialization strategy,and this can also improve the level of corporate risk-taking.The main innovations or new findings in this dissertation are as follows:1.In theory,using the theory and method of the new institutional economics to analyze the institution and the changes of the institution,a theoretical analysis framework for the intergenerational succession of family businesses in the Chinese institutional environment is established.2.In empirically,firstly,it has confirmed that the intergenerational succession of family businesses has a significant negative impact on the level of corporate risk-taking;secondly,it has been found that social capital and strategic decisions can improve the level of corporate risk-taking in the intergenerational succession period.