An Empirical Study On The Influence Of The Family Characteristics Of Private Enterprises On The Growth Of Enterprises

The private sectors are in quick growth in China, which most of them were founded through family holding companies. The main voice oftheoretical criticism isthat the family characteristics of the enterprises hinder the company growth due to its relative primitive company governance. According to the previous study, the family holding firms have its own advantages comparing to the form business organizations especially in the early stage of the company growth, such as quick response and lower agency costs, which benefits the survivorship of the private enterprises. While with the business growing, some reforms are needed to better fit the requirement of the company future growth. Nowadays in China, after thethree decades development of the private sector, some of the private enterprises are already quite successful, while some of them are still facing their own problems from the family characteristics. For brighter future, the companies need to decide whether consist the family holding or not, and if not, what changes are needed.This work aims to understand the impact of the family characteristics to the company growth and to provide preliminaryanswer to these questions through multiple regressions based on the data of listed companies. The model is built based on the listed company in A stock market.taking consideration of the variables of the ownership concentration, key position assignments, family owners’ability, financing leverage and company succession are taken in account to reflect the family characteristics.And Tobin’s Q is used to indicate the future growth opportunities.The regressions results shows that the family characteristics overall benefits the company future growth, while the positive effects diminishes with the size grown up, and the financing difficulty from private ownership and family controlling thinking is the main obstacle for the development of the private enterprises. And based on research results, several recommendations are raised, including enhancing the human resource opening, including more outside equity investors, well planning the company succession and enhancement of financial transparency.