Family Operation And Performance Of Chinese Private Enterprises

The family-controlled firm or faimly ownership is the most common form of business organization in the world, and the influence of family factors on firm performance has long been controversial.We compare corporate governance and performance between family and non-familiy private ownership of public listed companies in China from2005-2010measured by tobin’q, roa and roe. We find that on average firm performance is larger in family firms than non-family private firms, while duality, independent director and separation degree have a significant negtive impact on firm performance in family firms as compared to non-family firms. However, as predicted, the largest shareholder’s stake increases the positive effect on performance. In addition, this paper also examines how firm size, firm reputation, growth opportunities and capital structure affects the performance.