| As a unique mechanism of corporate governance, family control lays the foundation for family business to pursue and accomplish the family goals, which are oriented by family interests. However, contradiction between succession and business development is the harsh reality around the world. Board of directors plays a significant role in family business governance. Especially in the process of trans-generational involvement, board social capital benefits family business with abundant social network and various key resources. From extant studies, there are few researchers who have integrated board social capital with family business study.Based on the above background, this paper mainly discusses the family control and its influence mechanism on family business performance. Different from previous research, this article not only focuses on the relationship between family control and firm performance, but also extends this logic chain. First, we deconstruct "family member" into three categories, in order to explore the relationship among family control, trans-generational involvement and family firm performance. Then, the present work introduces "board social capital" into the research model for the purpose of examining its moderating effect on the relationship between trans-generational involvement and firm performance.Adopting narrow definition of family business, this paper collects data about Chinese listed companies from Shanghai and Shenzhen Stock Exchange. Through empirical research, the findings are as follow:(1) The family ownership and family management have a significantly negative impact on family business performance respectively, while the relationship between founder CEO and performance is not proved.(2) Family control has different influence on trans-generational involvement. Family ownership does not affect the degree of trans-generational involvement. On the other side, family management positively associates with trans-generational involvement, whereas founder CEO hinders the involvement of next generation.(3) It has been examined that trans-generational involvement negatively influences firm value.(4) Trans-generational involvement plays as a mediator variable between family control and firm performance, and board social capital plays as a moderator variable between trans-generational involvement and firm performance.Based on these finding, this paper makes contribution to theory development. Firstly, it explains the influence mechanism of family control on firm perform from the board social capital perspective, and explores the interdisciplinary research integrating both the family business field and board social capital field. Secondly, this paper tries to distinguish management involvement of different generations, and brings valuable theoretical thinking towards family business trans-generational involvement. Thirdly, we introduce "trans-generational involvement" into research model as a mediator, bridging the family system and business system, and provide fresh thoughts for future family business governance research. |
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