Couples' Joint Holdings And Family Firm's Financial Decision Making

Since the reform and opening,China's private enterprises have developed rapidly and played an important role in the development of national economy.Influenced by many factors such as Chinese traditional culture and enterprise system,most of China's private enterprises have a strong family atmosphere.On the one hand,familization will reduce the agency cost of enterprises,but will also lead to other governance problems.Therefore,the healthy development of family business has always been one of the concerns of business and academic circles.At present,from roadside stalls,small workshops to listed companies with a market value of several billion,there are a large number of "husband wife partnership" enterprises.When husband and wife share the family business together,does it mean that marriage is more involved in the business,and family decision-making is more likely to affect business decision-making? These problems deserve our deep thinking.However,in different family businesses,there are differences in the degree of involvement in the company between the husband and wife,which may have an impact on the operation and development of family businesses.It is well reflected in the marital events of the actual controllers of Listed Companies in China's capital market in recent years.Therefore,it is of great theoretical and practical significance to study the financial decision-making of family business from the perspective of couples' joint holdings.This paper hopes to provide decision-making reference and experience support for family enterprises to improve the governance structure,have a healthy long-term development and create more social value through the research results on the financial decision-making of family enterprises jointly owned by the couple.Through the study of this paper,we hope to help stakeholders in the market better understand the financial decision-making mode of family enterprises jointly owned by the couple,and provide effective reference for their investment in listed family enterprises.Firstly,this paper defines several main concepts involved in empirical research,including family business,couples' joint holdings and financial decision-making.This paper summarizes the theoretical basis of family business research,including agency theory,social emotional wealth theory and stewardship theory.Then,this paper summarizes the literature on the relationship between the couples' joint holdings of the actual controller and family business investment behavior,the couples' joint holdings of the actual controller and family business debt financing behavior,the couples' joint holdings of the actual controller and family business dividend distribution policy.In the empirical study,we use the listed family enterprises from 2007 to 2018 as the research sample.This paper focuses on the perspective of couples' joint holdings of the actual controller,based on the social emotional wealth theory,stewardship theory and agency theory.Through theoretical analysis and empirical test,this paper studies the relationship between couples' joint holdings and financial decision-making of family enterprises.Financial decision-making mainly includes capital expenditure(investment in fixed assets and equity assets),debt financing and dividend distribution policy.Through PSM analysis,instrumental variable method,lag regression and fixed effects model,the robustness test is carried out to ensure the robustness of the empirical results.At the same time,this paper also fully considers the influence of the degree of marketization,the growth stage of the enterprise and the degree of the actual controller's participation in the operation and management of the enterprise.Through the group study,this paper discusses the relationship between couples' joint holdings and the changes of family business in the correlation between financial decisions.Combined with the relevant empirical research results,this paper draws the following conclusions:Firstly,the influence of couples' joint holdings on different types of investment behavior of family business is different.Compared with the family business held by the actual controller alone,the family business held by the couple has a higher investment level in fixed assets investment.Compared with the family business held by the actual controller alone,the investment level of the family business held by the couple is lower.This shows that compared with the family business held by the actual controller alone,the family business held by the couple is more likely to increase the investment in fixed assets and reduce the investment in equity assets.In high degree of marketization areas,the impact of couples' joint holdings on equity investment behavior is more obvious;in low degree of marketization areas,the impact of couples' joint holdings on fixed asset investment is more obvious.No matter how the level of corporate profitability,the impact of couples' joint holdings on fixed asset investment has always existed,and the impact in the low profit stage is weaker than that in the high profit stage.The level of profitability will weaken the negative impact of joint ownership on equity investment to a certain extent.The complexity of corporate organizational structure will weaken the influence of couples' joint holdings on the investment of family business to a certain extent.When the actual controller does not act as the chairman or general manager of the enterprise,the influence of couples' joint holdings on the investment of family business will be weakened to a certain extent.Secondly,compared with the family business held by the actual controller alone,the debt to asset ratio will be lower and the debt maturity structure will be shorter in the family business jointly held by the couple.And more conservative strategy will be used in debt financing decision-making.Only in the relatively low degree of marketization areas,couples' joint holdings has a significant impact on corporate debt financing behavior.In the high degree of marketization areas,the influence of couples' joint holdings on corporate financing behavior is not significant.The higher the degree of marketization,the weaker the influence of couples' joint holdings on the asset liability ratio and debt maturity structure.Only when the corporate profitability is relatively weak,the couples' joint holdings and corporate debt financing behavior have a significant impact.However,when the corporate profitability is high,the effect of joint ownership on corporate debt financing behavior is not significant.When the profit level of the enterprise is higher,the negative impact of couples' joint holdings on the asset liability ratio and debt maturity structure of the family enterprise is weaker.Only when the organizational structure of the enterprise is relatively simple,the couples' joint holdings and the debt financing behavior of the enterprise have a significant impact.When the organizational structure of the enterprise is complex,the influence of the couples' joint holdings on the debt financing behavior is not significant.When the organizational structure of the enterprise is more complex,the negative impact of couples' joint holdings on the asset liability ratio and debt maturity structure of the family enterprise is weaker.Only when the actual controller is the chairman or general manager of the company,the couples' joint holdings has a significant impact on the debt financing behavior.When the actual controller is not the chairman or general manager of the enterprise,the negative impact of joint ownership on debt financing behavior is not significant.When the actual controller does not act as the chairman or general manager of the enterprise,the negative impact of the couples' joint holdings on the asset liability ratio and debt maturity structure of the family enterprise is weaker.Thirdly,the probability of distribution of cash dividends is higher and the dividend payment rate is higher in the family business which husband and wife both hold shares.Whether the enterprise is in the high marketization area or low marketization area,the influence of couples' joint holdings on the dividend distribution always exists.The degree of marketization will weaken the effect of couples' joint holdings on corporate dividend distribution to a certain extent,but does not change the relationship between them.The level of corporate profitability does not change the effect of couples' joint holdings on whether to pay cash dividends,but it will weaken the effect of couples' joint holdings on the dividend payment rate.When the organizational structure of the enterprise is more complex,the effect of couples' joint holdings on whether the family enterprise pays cash dividends and dividend payment rate is weaker.When the actual controller is not the chairman or general manager of the enterprise,the couples' joint holdings has no effect on whether the family enterprise pays cash dividends.But the couples' joint holdings will still have a positive effect on the dividend payment rate.Only when the actual controller is the chairman or general manager of the enterprise,the probability of paying cash dividends will be higher,the dividend payment rate will be larger.The contributions of this paper mainly focus on the following aspects:Firstly,this study effectively supplements the research literature of husband-wife family business.Existing researchs have focused more on the relationship between fatherson relationship and corporate finance.The literature on the relationship between couples' joint holdings and family business behavior is relatively scarce.Research methods are mostly about theoretical research and case study.This paper studies the financial decision-making behavior of family business from the perspective of couples' joint holdings,which helps to deepen the understanding of the heterogeneity of family business.Secondly,after the couple jointly hold shares,the family has more social emotional wealth.In order to protect the social emotional wealth,the financial decision-making of family business will also tend to be conservative.Through the study of this paper,we can effectively enrich the relevant literature on the use of social emotional wealth theory to explain family business behavior.Thirdly,this paper expands the research on family involvement and financial decision-making behavior of family business.In the past,the research on matrimonial family business mainly focused on the risk-taking of the business,less involved in the relatively complete financial decision-making behavior.This paper studies the relationship between couples' different risk preferences and financial decision-making,and provides empirical evidence for investors to invest in listed family businesses.Fourth,this paper expands the related research about financial decision-making behavior of family business in different situations.The development of family business is affected by the growth stage of the enterprise itself,the change of external business environment and the kinship of family members.This paper focuses on the relationship between couples' joint holdings and financial decision-making of family business.At the same time,it relies on different internal and external situations of family business to detailed study the problem.