Research On The Governance Structure Of Family Business

During the transition of Chinese economy, the mutual development andpromotion of private and state-owned economic sectors form the development patternof mixed economy. Family business is an old organization, while still one of the mostvigorous modernism enterprise styles. In all major economies around the world, mostenterprises take the form of family business, which even accounts for a significantproportion in listing and multinational companies. Family business is a subject thatwill never grow old. Honestly, it has shortages such as non-transparent information,nepotistic appointment and patriarchal style. However, it also has unique advantagessuch as inner unity and trust, outstanding cost control and so on, all of whichcontribute to the steady growth and offset its innate shortage in its embryotic stage.Now, along with the developing of socialist marketing economy of our country,family business becomes important economic strength once again.The governance of family business is a subject which needs constant research. Inrecent years, domestic and foreign scholars learn and state it deeply, and form theirown unique viewpoint, which lay a solid foundation for following research. Based onthe new perspective of rent dissipation, this paper seeks to study the connotation offamily business, and expand the understanding of its governance structure and theresearch extent. This paper includes two parts: the first part is consisted of the secondand third chapters, which mainly introduce the definition and connotation of familybusiness, its governance structure and rent, as well the development history and basiccharacteristics; the second part contains the fourth and fifth chapters, which introducethe capital structure of family business and its relationship with structure of corporategovernance, the principal-agent relation of structure of family enterprises’ governance,and the traits of financing structure. Then the mathematic model will be founded to analyses the rent dissipation and the saving of its transaction cost under thesestructures of family business.