Performance Of Listed Family Enterprises And Their Intergenerational Inheritance

Since the reform and opening up, China’s private economy has experienced a remarkable development course. As an important component in the private economy, family business has also gradually increased its role in society. Meanwhile, with the first-generation members of the family get old and the second-generation members gradually mature, owners of family business have started considering successors. Therefore, research on family business and its succession in China will be of great significance. With the analysis of these issues, this thesis is expected to reveal the mystery of family business and its succession in China.Review and summary of the relevant literature, combined with the characteristics of the development of family business in China help us to put forward several key hypotheses. Subsequently, we figure out the features of industry and geographical distribution of652family firms listed on the Shanghai and Shenzhen A-share market in our study. Also we find the special routine for family firm succession in China. Then, by the summary statistics of China’s listed private companies from2009to2011, we draw some preliminary conclusions.Additional analysis reveals that family firms perform worse than nonfamily firms due to the ambiguous boundaries among family, firm and ownership. Meanwhile, the legal and cultural system in China created a special routine for family firm succession, in which most successors come within the family. And when second-generation members serve as CEOs, family firm performance is worse than with first-generation members or professional managers as CEOs. What’s more, we find nonlinear relation between firm performance and family control or its listed time. Namely, with the rise of the latter two, firm performance will increase at first, and decrease sooner.Overall, our results are consistent with the hypotheses we put forward before. From the two aspects of the family business and market environment, we make several recommendations for the development of the family business and its succession.